Correlation Between VIRGIN WINES and Sunny Optical

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

By analyzing existing cross correlation between VIRGIN WINES UK and Sunny Optical Technology, you can compare the effects of market volatilities on VIRGIN WINES and Sunny Optical 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 VIRGIN WINES with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and Sunny Optical.

Diversification Opportunities for VIRGIN WINES and Sunny Optical

0.0

Correlation Coefficient

VIRGIN WINES  Sunny Optical

Pay attention - limited upside

The 3 months correlation between VIRGIN and Sunny is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIRGIN WINES UK and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and VIRGIN WINES 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 VIRGIN WINES UK are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of VIRGIN WINES i.e., VIRGIN WINES and Sunny Optical go up and down completely randomly.

Pair Corralation between VIRGIN WINES and Sunny Optical

If you would invest  549.00  in Sunny Optical Technology on September 5, 2024 and sell it today you would earn a total of  235.00  from holding Sunny Optical Technology or generate 42.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

VIRGIN WINES UK  vs.  Sunny Optical Technology

VIRGIN WINES UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIRGIN WINES UK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VIRGIN WINES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sunny Optical Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sunny Optical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIRGIN WINES and Sunny Optical

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

The idea behind VIRGIN WINES UK and Sunny Optical Technology 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.