Correlation Between Sunny Optical and Gruppo MutuiOnline

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

Diversification Opportunities for Sunny Optical and Gruppo MutuiOnline

0.33

Correlation Coefficient

Sunny Optical  Gruppo MutuiOnline

Weak diversification

The 3 months correlation between Sunny and Gruppo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Gruppo MutuiOnline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo MutuiOnline SpA 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 Gruppo MutuiOnline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo MutuiOnline SpA has no effect on the direction of Sunny Optical i.e., Sunny Optical and Gruppo MutuiOnline go up and down completely randomly.

Pair Corralation between Sunny Optical and Gruppo MutuiOnline

Assuming the 90 days trading horizon Sunny Optical is expected to generate 1.0 times less return on investment than Gruppo MutuiOnline. In addition to that, Sunny Optical is 1.13 times more volatile than Gruppo MutuiOnline SpA. It trades about 0.18 of its total potential returns per unit of risk. Gruppo MutuiOnline SpA is currently generating about 0.21 per unit of volatility. If you would invest  3,285  in Gruppo MutuiOnline SpA on September 20, 2024 and sell it today you would earn a total of  664.00  from holding Gruppo MutuiOnline SpA or generate 20.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	43.75%
Values	Daily Returns

Sunny Optical Technology  vs.  Gruppo MutuiOnline SpA

Sunny Optical Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sunny Optical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gruppo MutuiOnline SpA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo MutuiOnline SpA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gruppo MutuiOnline unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunny Optical and Gruppo MutuiOnline

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

The idea behind Sunny Optical Technology and Gruppo MutuiOnline SpA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..