Correlation Between SUN and Beldex

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

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

Diversification Opportunities for SUN and Beldex

-0.59

Correlation Coefficient

SUN  Beldex

Excellent diversification

The 3 months correlation between SUN and Beldex is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding SUN and Beldex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beldex and SUN 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 SUN are associated (or correlated) with Beldex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beldex has no effect on the direction of SUN i.e., SUN and Beldex go up and down completely randomly.

Pair Corralation between SUN and Beldex

Assuming the 90 days trading horizon SUN is expected to under-perform the Beldex. In addition to that, SUN is 1.75 times more volatile than Beldex. It trades about -0.04 of its total potential returns per unit of risk. Beldex is currently generating about 0.22 per unit of volatility. If you would invest  5.17  in Beldex on September 1, 2024 and sell it today you would earn a total of  2.74  from holding Beldex or generate 53.0% return on investment over 90 days.

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

SUN  vs.  Beldex

SUN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUN 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 Crypto's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for SUN shareholders.

Beldex

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beldex are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Beldex exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUN and Beldex

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

The idea behind SUN and Beldex 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 Commodity Directory module to find actively traded commodities issued by global exchanges.