Correlation Between Synopex and IQuest
Can any of the company-specific risk be diversified away by investing in both Synopex and IQuest 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 Synopex and IQuest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synopex and IQuest Co, you can compare the effects of market volatilities on Synopex and IQuest 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 Synopex with a short position of IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synopex and IQuest.
Diversification Opportunities for Synopex and IQuest
Good diversification
The 3 months correlation between Synopex and IQuest is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Synopex and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest and Synopex 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 Synopex are associated (or correlated) with IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of Synopex i.e., Synopex and IQuest go up and down completely randomly.
Pair Corralation between Synopex and IQuest
Assuming the 90 days trading horizon Synopex is expected to under-perform the IQuest. In addition to that, Synopex is 1.21 times more volatile than IQuest Co. It trades about -0.04 of its total potential returns per unit of risk. IQuest Co is currently generating about 0.18 per unit of volatility. If you would invest 221,000 in IQuest Co on August 25, 2024 and sell it today you would earn a total of 28,500 from holding IQuest Co or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synopex vs. IQuest Co
Performance |
| Timeline |
| Synopex |
| IQuest |
Synopex and IQuest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synopex and IQuest
The main advantage of trading using opposite Synopex and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synopex position performs unexpectedly, IQuest 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 IQuest will offset losses from the drop in IQuest's long position.| Synopex vs. Korea Real Estate | Synopex vs. Korea Ratings Co | Synopex vs. IQuest Co | Synopex vs. Wonbang Tech Co |
| IQuest vs. Coloray International Investment | IQuest vs. DSC Investment | IQuest vs. Air Busan Co | IQuest vs. EBEST Investment Securities |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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