Correlation Between Newretail and Sun Max

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

By analyzing existing cross correlation between Newretail Co and Sun Max Tech, you can compare the effects of market volatilities on Newretail and Sun Max 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 Newretail with a short position of Sun Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Sun Max.

Diversification Opportunities for Newretail and Sun Max

0.51

Correlation Coefficient

Newretail  Sun Max

Very weak diversification

The 3 months correlation between Newretail and Sun is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Sun Max Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Max Tech and Newretail 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 Newretail Co are associated (or correlated) with Sun Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Max Tech has no effect on the direction of Newretail i.e., Newretail and Sun Max go up and down completely randomly.

Pair Corralation between Newretail and Sun Max

Assuming the 90 days trading horizon Newretail Co is expected to generate 1.68 times more return on investment than Sun Max. However, Newretail is 1.68 times more volatile than Sun Max Tech. It trades about 0.07 of its potential returns per unit of risk. Sun Max Tech is currently generating about 0.01 per unit of risk. If you would invest  2,145  in Newretail Co on September 22, 2024 and sell it today you would earn a total of  255.00  from holding Newretail Co or generate 11.89% return on investment over 90 days.

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

Newretail Co  vs.  Sun Max Tech

Newretail

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Newretail Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Newretail showed solid returns over the last few months and may actually be approaching a breakup point.

Sun Max Tech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Max Tech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sun Max is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Newretail and Sun Max

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

The idea behind Newretail Co and Sun Max Tech 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.