Correlation Between Sunrise New and Hayward Holdings

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

By analyzing existing cross correlation between Sunrise New Energy and Hayward Holdings, you can compare the effects of market volatilities on Sunrise New and Hayward Holdings 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 Sunrise New with a short position of Hayward Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrise New and Hayward Holdings.

Diversification Opportunities for Sunrise New and Hayward Holdings

-0.68

Correlation Coefficient

Sunrise New  Hayward Holdings

Excellent diversification

The 3 months correlation between Sunrise and Hayward is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and Hayward Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hayward Holdings and Sunrise New 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 Sunrise New Energy are associated (or correlated) with Hayward Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hayward Holdings has no effect on the direction of Sunrise New i.e., Sunrise New and Hayward Holdings go up and down completely randomly.

Pair Corralation between Sunrise New and Hayward Holdings

Given the investment horizon of 90 days Sunrise New Energy is expected to under-perform the Hayward Holdings. In addition to that, Sunrise New is 4.4 times more volatile than Hayward Holdings. It trades about -0.23 of its total potential returns per unit of risk. Hayward Holdings is currently generating about -0.11 per unit of volatility. If you would invest  1,660  in Hayward Holdings on August 31, 2024 and sell it today you would lose (42.00) from holding Hayward Holdings or give up 2.53% of portfolio value over 90 days.

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

Sunrise New Energy  vs.  Hayward Holdings

Sunrise New Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunrise New Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Hayward Holdings

Risk-Adjusted Performance

10 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hayward Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Hayward Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunrise New and Hayward Holdings

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

The idea behind Sunrise New Energy and Hayward Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.