Correlation Between Sun Art and IBU Tec

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

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

Diversification Opportunities for Sun Art and IBU Tec

0.45

Correlation Coefficient

Sun Art  IBU Tec

Very weak diversification

The 3 months correlation between Sun and IBU is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sun Art Retail and IBU tec advanced materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBU tec advanced and Sun Art 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 Art Retail are associated (or correlated) with IBU Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBU tec advanced has no effect on the direction of Sun Art i.e., Sun Art and IBU Tec go up and down completely randomly.

Pair Corralation between Sun Art and IBU Tec

Assuming the 90 days trading horizon Sun Art is expected to generate 1.83 times less return on investment than IBU Tec. But when comparing it to its historical volatility, Sun Art Retail is 1.14 times less risky than IBU Tec. It trades about 0.1 of its potential returns per unit of risk. IBU tec advanced materials is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  582.00  in IBU tec advanced materials on April 21, 2025 and sell it today you would earn a total of  250.00  from holding IBU tec advanced materials or generate 42.96% return on investment over 90 days.

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

Sun Art Retail  vs.  IBU tec advanced materials

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.

IBU tec advanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IBU tec advanced materials are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, IBU Tec unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Art and IBU Tec

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

The idea behind Sun Art Retail and IBU tec advanced materials 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.