Correlation Between DATAWALK B and Sunny Optical

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

By analyzing existing cross correlation between DATAWALK B H ZY and Sunny Optical Technology, you can compare the effects of market volatilities on DATAWALK B and Sunny Optical 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 DATAWALK B with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATAWALK B and Sunny Optical.

Diversification Opportunities for DATAWALK B and Sunny Optical

-0.12

Correlation Coefficient

DATAWALK B  Sunny Optical

Good diversification

The 3 months correlation between DATAWALK and Sunny is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding DATAWALK B H ZY and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and DATAWALK B 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 DATAWALK B H ZY are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of DATAWALK B i.e., DATAWALK B and Sunny Optical go up and down completely randomly.

Pair Corralation between DATAWALK B and Sunny Optical

Assuming the 90 days horizon DATAWALK B H ZY is expected to generate 0.93 times more return on investment than Sunny Optical. However, DATAWALK B H ZY is 1.07 times less risky than Sunny Optical. It trades about 0.13 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about -0.04 per unit of risk. If you would invest  1,488  in DATAWALK B H ZY on January 24, 2025 and sell it today you would earn a total of  542.00  from holding DATAWALK B H ZY or generate 36.42% return on investment over 90 days.

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

DATAWALK B H ZY  vs.  Sunny Optical Technology

DATAWALK B H

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DATAWALK B H ZY are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DATAWALK B reported solid returns over the last few months and may actually be approaching a breakup point.

Sunny Optical Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunny Optical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with DATAWALK B and Sunny Optical

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

The idea behind DATAWALK B H ZY and Sunny Optical Technology 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.