Correlation Between Voksel Electric and Sunson Textile

Can any of the company-specific risk be diversified away by investing in both Voksel Electric and Sunson Textile 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 Voksel Electric and Sunson Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voksel Electric Tbk and Sunson Textile Manufacturer, you can compare the effects of market volatilities on Voksel Electric and Sunson Textile 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 Voksel Electric with a short position of Sunson Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voksel Electric and Sunson Textile.

Diversification Opportunities for Voksel Electric and Sunson Textile

0.01

Correlation Coefficient

Voksel Electric  Sunson Textile

Significant diversification

The 3 months correlation between Voksel and Sunson is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Voksel Electric Tbk and Sunson Textile Manufacturer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunson Textile Manuf and Voksel Electric 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 Voksel Electric Tbk are associated (or correlated) with Sunson Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunson Textile Manuf has no effect on the direction of Voksel Electric i.e., Voksel Electric and Sunson Textile go up and down completely randomly.

Pair Corralation between Voksel Electric and Sunson Textile

Assuming the 90 days trading horizon Voksel Electric Tbk is expected to generate 1.28 times more return on investment than Sunson Textile. However, Voksel Electric is 1.28 times more volatile than Sunson Textile Manufacturer. It trades about 0.04 of its potential returns per unit of risk. Sunson Textile Manufacturer is currently generating about -0.08 per unit of risk. If you would invest  18,000  in Voksel Electric Tbk on September 12, 2024 and sell it today you would earn a total of  6,400  from holding Voksel Electric Tbk or generate 35.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Voksel Electric Tbk  vs.  Sunson Textile Manufacturer

Voksel Electric Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voksel Electric Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Voksel Electric may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sunson Textile Manuf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunson Textile Manufacturer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sunson Textile is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Voksel Electric and Sunson Textile

The main advantage of trading using opposite Voksel Electric and Sunson Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voksel Electric position performs unexpectedly, Sunson Textile 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 Sunson Textile will offset losses from the drop in Sunson Textile's long position.

The idea behind Voksel Electric Tbk and Sunson Textile Manufacturer 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.