Correlation Between Suny Cellular and Israel China

Can any of the company-specific risk be diversified away by investing in both Suny Cellular and Israel China 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 Israel China 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 Israel China Biotechnology, you can compare the effects of market volatilities on Suny Cellular and Israel China 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 Israel China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suny Cellular and Israel China.

Diversification Opportunities for Suny Cellular and Israel China

-0.41

Correlation Coefficient

Suny Cellular  Israel China

Very good diversification

The 3 months correlation between Suny and Israel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Suny Cellular Communication and Israel China Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel China Biotech 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 Israel China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel China Biotech has no effect on the direction of Suny Cellular i.e., Suny Cellular and Israel China go up and down completely randomly.

Pair Corralation between Suny Cellular and Israel China

Assuming the 90 days trading horizon Suny Cellular is expected to generate 33.65 times less return on investment than Israel China. But when comparing it to its historical volatility, Suny Cellular Communication is 23.8 times less risky than Israel China. It trades about 0.04 of its potential returns per unit of risk. Israel China Biotechnology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,320  in Israel China Biotechnology on September 29, 2024 and sell it today you would earn a total of  43,380  from holding Israel China Biotechnology or generate 521.39% return on investment over 90 days.

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

Suny Cellular Communication  vs.  Israel China Biotechnology

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.

Israel China Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Israel China Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Suny Cellular and Israel China

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

The idea behind Suny Cellular Communication and Israel China Biotechnology 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 CEOs Directory module to screen CEOs from public companies around the world.