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

0.68

Correlation Coefficient

Sunrise New  Ilika Plc

Poor diversification

The 3 months correlation between Sunrise and Ilika is 0.68. 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 is expected to generate 1.57 times less return on investment than Ilika Plc. In addition to that, Sunrise New is 1.96 times more volatile than Ilika plc. It trades about 0.02 of its total potential returns per unit of risk. Ilika plc is currently generating about 0.06 per unit of volatility. If you would invest  24.00  in Ilika plc on September 9, 2024 and sell it today you would earn a total of  1.00  from holding Ilika plc or generate 4.17% 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

Sunrise New Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunrise New Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sunrise New is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ilika plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ilika plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

The idea behind Sunrise New Energy and Ilika plc 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.