Correlation Between Sunfar Computer and Camellia Metal

Can any of the company-specific risk be diversified away by investing in both Sunfar Computer and Camellia Metal 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 Camellia Metal 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 Camellia Metal Co, you can compare the effects of market volatilities on Sunfar Computer and Camellia Metal 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 Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfar Computer and Camellia Metal.

Diversification Opportunities for Sunfar Computer and Camellia Metal

0.34

Correlation Coefficient

Sunfar Computer  Camellia Metal

Weak diversification

The 3 months correlation between Sunfar and Camellia is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sunfar Computer Co and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal 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 Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Sunfar Computer i.e., Sunfar Computer and Camellia Metal go up and down completely randomly.

Pair Corralation between Sunfar Computer and Camellia Metal

Assuming the 90 days trading horizon Sunfar Computer is expected to generate 2.03 times less return on investment than Camellia Metal. But when comparing it to its historical volatility, Sunfar Computer Co is 3.45 times less risky than Camellia Metal. It trades about 0.02 of its potential returns per unit of risk. Camellia Metal Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,495  in Camellia Metal Co on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Camellia Metal Co or generate 0.33% return on investment over 90 days.

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

Sunfar Computer Co  vs.  Camellia Metal Co

Sunfar Computer

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunfar Computer Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Camellia Metal

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Camellia Metal Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Camellia Metal 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 Camellia Metal

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

The idea behind Sunfar Computer Co and Camellia Metal Co 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.