Correlation Between Brockhaus Capital and Sun Art

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

By analyzing existing cross correlation between Brockhaus Capital Management and Sun Art Retail, you can compare the effects of market volatilities on Brockhaus Capital and Sun Art 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 Brockhaus Capital with a short position of Sun Art. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Sun Art.

Diversification Opportunities for Brockhaus Capital and Sun Art

-0.38

Correlation Coefficient

Brockhaus Capital  Sun Art

Very good diversification

The 3 months correlation between Brockhaus and Sun is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Sun Art Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Art Retail and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with Sun Art. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Art Retail has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and Sun Art go up and down completely randomly.

Pair Corralation between Brockhaus Capital and Sun Art

Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the Sun Art. But the stock apears to be less risky and, when comparing its historical volatility, Brockhaus Capital Management is 1.09 times less risky than Sun Art. The stock trades about -0.04 of its potential returns per unit of risk. The Sun Art Retail is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Sun Art Retail on April 24, 2025 and sell it today you would earn a total of  4.00  from holding Sun Art Retail or generate 20.0% return on investment over 90 days.

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

Brockhaus Capital Management  vs.  Sun Art Retail

Brockhaus Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sun Art Retail

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Art Retail are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sun Art unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brockhaus Capital and Sun Art

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

The idea behind Brockhaus Capital Management and Sun Art Retail 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.