Correlation Between Sui and Sleepless

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

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

Diversification Opportunities for Sui and Sleepless

0.71

Correlation Coefficient

Sui  Sleepless

Poor diversification

The 3 months correlation between Sui and Sleepless is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sui and Sleepless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sleepless and Sui 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 Sui are associated (or correlated) with Sleepless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sleepless has no effect on the direction of Sui i.e., Sui and Sleepless go up and down completely randomly.

Pair Corralation between Sui and Sleepless

Assuming the 90 days trading horizon Sui is expected to generate 0.99 times more return on investment than Sleepless. However, Sui is 1.01 times less risky than Sleepless. It trades about 0.02 of its potential returns per unit of risk. Sleepless is currently generating about -0.12 per unit of risk. If you would invest  360.00  in Sui on February 3, 2025 and sell it today you would lose (25.00) from holding Sui or give up 6.94% of portfolio value over 90 days.

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

Sui  vs.  Sleepless

Sui

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sui are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, Sui may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Sleepless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sleepless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for Sleepless shareholders.

Pair Trading with Sui and Sleepless

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

The idea behind Sui and Sleepless 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.