Correlation Between Sunrise New and Ilika Plc
Can any of the company-specific risk be diversified away by investing in both Sunrise New and Ilika Plc 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 Sunrise New and Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrise New Energy and Ilika plc, you can compare the effects of market volatilities on Sunrise New and Ilika Plc 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 Sunrise New with a short position of Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrise New and Ilika Plc.
Diversification Opportunities for Sunrise New and Ilika Plc
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunrise and Ilika is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc and Sunrise New 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 Sunrise New Energy are associated (or correlated) with Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of Sunrise New i.e., Sunrise New and Ilika Plc go up and down completely randomly.
Pair Corralation between Sunrise New and Ilika Plc
Given the investment horizon of 90 days Sunrise New Energy is expected to under-perform the Ilika Plc. In addition to that, Sunrise New is 1.73 times more volatile than Ilika plc. It trades about -0.03 of its total potential returns per unit of risk. Ilika plc is currently generating about 0.17 per unit of volatility. If you would invest 24.00 in Ilika plc on September 11, 2024 and sell it today you would earn a total of 5.00 from holding Ilika plc or generate 20.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sunrise New Energy vs. Ilika plc
Performance |
Timeline |
Sunrise New Energy |
Ilika plc |
Sunrise New and Ilika Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sunrise New and Ilika Plc
The main advantage of trading using opposite Sunrise New and Ilika Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrise New position performs unexpectedly, Ilika Plc 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 Ilika Plc will offset losses from the drop in Ilika Plc's long position.Sunrise New vs. Espey Mfg Electronics | Sunrise New vs. NeoVolta Warrant | Sunrise New vs. Kimball Electronics | Sunrise New vs. Hayward Holdings |
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Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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