Correlation Between Sunny Optical and Evolution Mining

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Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on Sunny Optical and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Evolution Mining.

Diversification Opportunities for Sunny Optical and Evolution Mining

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sunny and Evolution is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Sunny Optical i.e., Sunny Optical and Evolution Mining go up and down completely randomly.

Pair Corralation between Sunny Optical and Evolution Mining

Assuming the 90 days horizon Sunny Optical Technology is expected to under-perform the Evolution Mining. In addition to that, Sunny Optical is 1.32 times more volatile than Evolution Mining Limited. It trades about 0.0 of its total potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.04 per unit of volatility. If you would invest  200.00  in Evolution Mining Limited on October 9, 2024 and sell it today you would earn a total of  90.00  from holding Evolution Mining Limited or generate 45.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sunny Optical Technology  vs.  Evolution Mining Limited

 Performance 
       Timeline  
Sunny Optical Technology 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Sunny Optical reported solid returns over the last few months and may actually be approaching a breakup point.
Evolution Mining 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolution Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sunny Optical and Evolution Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sunny Optical and Evolution Mining

The main advantage of trading using opposite Sunny Optical and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.
The idea behind Sunny Optical Technology and Evolution Mining 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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