Correlation Between Sunfar Computer and Apex Biotechnology

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

By analyzing existing cross correlation between Sunfar Computer Co and Apex Biotechnology Corp, you can compare the effects of market volatilities on Sunfar Computer and Apex Biotechnology 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 Sunfar Computer with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfar Computer and Apex Biotechnology.

Diversification Opportunities for Sunfar Computer and Apex Biotechnology

0.32

Correlation Coefficient

Sunfar Computer  Apex Biotechnology

Weak diversification

The 3 months correlation between Sunfar and Apex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sunfar Computer Co and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and Sunfar Computer 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 Sunfar Computer Co are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of Sunfar Computer i.e., Sunfar Computer and Apex Biotechnology go up and down completely randomly.

Pair Corralation between Sunfar Computer and Apex Biotechnology

Assuming the 90 days trading horizon Sunfar Computer Co is expected to generate 0.45 times more return on investment than Apex Biotechnology. However, Sunfar Computer Co is 2.22 times less risky than Apex Biotechnology. It trades about -0.02 of its potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.06 per unit of risk. If you would invest  1,605  in Sunfar Computer Co on September 2, 2024 and sell it today you would lose (10.00) from holding Sunfar Computer Co or give up 0.62% of portfolio value over 90 days.

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

Sunfar Computer Co  vs.  Apex Biotechnology Corp

Sunfar Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunfar Computer Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sunfar Computer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Apex Biotechnology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Apex Biotechnology 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 Sunfar Computer and Apex Biotechnology

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

The idea behind Sunfar Computer Co and Apex Biotechnology Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.