Correlation Between Chenbro Micom and Sun Max

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

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

Diversification Opportunities for Chenbro Micom and Sun Max

0.55

Correlation Coefficient

Chenbro Micom  Sun Max

Very weak diversification

The 3 months correlation between Chenbro and Sun is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chenbro Micom 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 Chenbro Micom 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 Chenbro Micom 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 Chenbro Micom i.e., Chenbro Micom and Sun Max go up and down completely randomly.

Pair Corralation between Chenbro Micom and Sun Max

Assuming the 90 days trading horizon Chenbro Micom is expected to generate 1.24 times less return on investment than Sun Max. In addition to that, Chenbro Micom is 1.34 times more volatile than Sun Max Tech. It trades about 0.09 of its total potential returns per unit of risk. Sun Max Tech is currently generating about 0.15 per unit of volatility. If you would invest  4,880  in Sun Max Tech on September 6, 2024 and sell it today you would earn a total of  770.00  from holding Sun Max Tech or generate 15.78% return on investment over 90 days.

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

Chenbro Micom Co  vs.  Sun Max Tech

Chenbro Micom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chenbro Micom Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chenbro Micom showed solid returns over the last few months and may actually be approaching a breakup point.

Sun Max Tech

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Max Tech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Max showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chenbro Micom and Sun Max

The main advantage of trading using opposite Chenbro Micom and Sun Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chenbro Micom 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 Chenbro Micom 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.