Correlation Between Sun Pacific and GCL Poly

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

By analyzing existing cross correlation between Sun Pacific Holding and GCL Poly Energy Holdings, you can compare the effects of market volatilities on Sun Pacific and GCL Poly 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 Pacific with a short position of GCL Poly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Pacific and GCL Poly.

Diversification Opportunities for Sun Pacific and GCL Poly

0.27

Correlation Coefficient

Sun Pacific  GCL Poly

Modest diversification

The 3 months correlation between Sun and GCL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sun Pacific Holding and GCL Poly Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCL Poly Energy and Sun Pacific 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 Pacific Holding are associated (or correlated) with GCL Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCL Poly Energy has no effect on the direction of Sun Pacific i.e., Sun Pacific and GCL Poly go up and down completely randomly.

Pair Corralation between Sun Pacific and GCL Poly

Given the investment horizon of 90 days Sun Pacific Holding is expected to generate 8.06 times more return on investment than GCL Poly. However, Sun Pacific is 8.06 times more volatile than GCL Poly Energy Holdings. It trades about 0.15 of its potential returns per unit of risk. GCL Poly Energy Holdings is currently generating about 0.12 per unit of risk. If you would invest  60.00  in Sun Pacific Holding on May 6, 2025 and sell it today you would earn a total of  90.00  from holding Sun Pacific Holding or generate 150.0% return on investment over 90 days.

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

Sun Pacific Holding  vs.  GCL Poly Energy Holdings

Sun Pacific Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Pacific Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Sun Pacific showed solid returns over the last few months and may actually be approaching a breakup point.

GCL Poly Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GCL Poly Energy Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, GCL Poly reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Pacific and GCL Poly

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

The idea behind Sun Pacific Holding and GCL Poly Energy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.