Correlation Between Sunny Optical and Ryman Healthcare

Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Ryman Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sunny Optical and Ryman Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunny Optical Technology and Ryman Healthcare Limited, you can compare the effects of market volatilities on Sunny Optical and Ryman Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sunny Optical with a short position of Ryman Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Ryman Healthcare.

Diversification Opportunities for Sunny Optical and Ryman Healthcare

-0.82

Correlation Coefficient

Sunny Optical  Ryman Healthcare

Pay attention - limited upside

The 3 months correlation between Sunny and Ryman is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Ryman Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Healthcare and Sunny Optical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sunny Optical Technology are associated (or correlated) with Ryman Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Healthcare has no effect on the direction of Sunny Optical i.e., Sunny Optical and Ryman Healthcare go up and down completely randomly.

Pair Corralation between Sunny Optical and Ryman Healthcare

Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.22 times more return on investment than Ryman Healthcare. However, Sunny Optical is 1.22 times more volatile than Ryman Healthcare Limited. It trades about 0.0 of its potential returns per unit of risk. Ryman Healthcare Limited is currently generating about -0.02 per unit of risk. If you would invest  1,170  in Sunny Optical Technology on October 24, 2024 and sell it today you would lose (372.00) from holding Sunny Optical Technology or give up 31.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.2%
Values	Daily Returns

Sunny Optical Technology  vs.  Ryman Healthcare Limited

Sunny Optical Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sunny Optical reported solid returns over the last few months and may actually be approaching a breakup point.

Ryman Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryman Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sunny Optical and Ryman Healthcare

The main advantage of trading using opposite Sunny Optical and Ryman Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Ryman Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ryman Healthcare will offset losses from the drop in Ryman Healthcare's long position.

The idea behind Sunny Optical Technology and Ryman Healthcare Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.