Correlation Between Sunlight Financial and Sentage Holdings

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

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

Diversification Opportunities for Sunlight Financial and Sentage Holdings

0.0

Correlation Coefficient

Sunlight Financial  Sentage Holdings

Pay attention - limited upside

The 3 months correlation between Sunlight and Sentage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sunlight Financial Holdings and Sentage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentage Holdings and Sunlight Financial 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 Sunlight Financial Holdings are associated (or correlated) with Sentage Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentage Holdings has no effect on the direction of Sunlight Financial i.e., Sunlight Financial and Sentage Holdings go up and down completely randomly.

Pair Corralation between Sunlight Financial and Sentage Holdings

If you would invest  47.00  in Sunlight Financial Holdings on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Sunlight Financial Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Sunlight Financial Holdings  vs.  Sentage Holdings

Sunlight Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunlight Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sunlight Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Sentage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sentage Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sentage Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sunlight Financial and Sentage Holdings

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

The idea behind Sunlight Financial Holdings and Sentage 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.