Correlation Between Suny Cellular and B Communications

Can any of the company-specific risk be diversified away by investing in both Suny Cellular and B Communications 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 Suny Cellular and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suny Cellular Communication and B Communications, you can compare the effects of market volatilities on Suny Cellular and B Communications 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 Suny Cellular with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suny Cellular and B Communications.

Diversification Opportunities for Suny Cellular and B Communications

0.81

Correlation Coefficient

Suny Cellular  B Communications

Very poor diversification

The 3 months correlation between Suny and BCOM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Suny Cellular Communication and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Suny Cellular 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 Suny Cellular Communication are associated (or correlated) with B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Suny Cellular i.e., Suny Cellular and B Communications go up and down completely randomly.

Pair Corralation between Suny Cellular and B Communications

Assuming the 90 days trading horizon Suny Cellular Communication is expected to generate 0.78 times more return on investment than B Communications. However, Suny Cellular Communication is 1.28 times less risky than B Communications. It trades about 0.14 of its potential returns per unit of risk. B Communications is currently generating about 0.06 per unit of risk. If you would invest  8,002  in Suny Cellular Communication on September 14, 2024 and sell it today you would earn a total of  4,698  from holding Suny Cellular Communication or generate 58.71% return on investment over 90 days.

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

Suny Cellular Communication  vs.  B Communications

Suny Cellular Commun

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Suny Cellular Communication are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suny Cellular sustained solid returns over the last few months and may actually be approaching a breakup point.

B Communications

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in B Communications are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, B Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Suny Cellular and B Communications

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

The idea behind Suny Cellular Communication and B Communications 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.