Correlation Between Sunny Optical and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on Sunny Optical and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Catalyst Media.
Diversification Opportunities for Sunny Optical and Catalyst Media
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sunny and Catalyst is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Sunny Optical i.e., Sunny Optical and Catalyst Media go up and down completely randomly.
Pair Corralation between Sunny Optical and Catalyst Media
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 2.16 times more return on investment than Catalyst Media. However, Sunny Optical is 2.16 times more volatile than Catalyst Media Group. It trades about 0.18 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.03 per unit of risk. If you would invest 4,380 in Sunny Optical Technology on September 12, 2024 and sell it today you would earn a total of 2,140 from holding Sunny Optical Technology or generate 48.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sunny Optical Technology vs. Catalyst Media Group
Performance |
Timeline |
Sunny Optical Technology |
Catalyst Media Group |
Sunny Optical and Catalyst Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sunny Optical and Catalyst Media
The main advantage of trading using opposite Sunny Optical and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.Sunny Optical vs. Hong Kong Land | Sunny Optical vs. Neometals | Sunny Optical vs. Coor Service Management | Sunny Optical vs. Fidelity Sustainable USD |
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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 Stocks Directory module to find actively traded stocks across global markets.
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