Correlation Between Hi Lai and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Hi Lai and SYN Tech 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 Hi Lai and SYN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hi Lai Foods Co and SYN Tech Chem Pharm, you can compare the effects of market volatilities on Hi Lai and SYN Tech 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 Hi Lai with a short position of SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hi Lai and SYN Tech.
Diversification Opportunities for Hi Lai and SYN Tech
Good diversification
The 3 months correlation between 1268 and SYN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hi Lai Foods Co and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem and Hi Lai 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 Hi Lai Foods Co are associated (or correlated) with SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Hi Lai i.e., Hi Lai and SYN Tech go up and down completely randomly.
Pair Corralation between Hi Lai and SYN Tech
Assuming the 90 days trading horizon Hi Lai Foods Co is expected to under-perform the SYN Tech. But the stock apears to be less risky and, when comparing its historical volatility, Hi Lai Foods Co is 2.21 times less risky than SYN Tech. The stock trades about -0.28 of its potential returns per unit of risk. The SYN Tech Chem Pharm is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 9,420 in SYN Tech Chem Pharm on August 29, 2024 and sell it today you would earn a total of 550.00 from holding SYN Tech Chem Pharm or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hi Lai Foods Co vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Hi Lai Foods |
| SYN Tech Chem |
Hi Lai and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hi Lai and SYN Tech
The main advantage of trading using opposite Hi Lai and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hi Lai position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.| Hi Lai vs. Hung Sheng Construction | Hi Lai vs. Chung Hsin Electric Machinery | Hi Lai vs. Grand Ocean Retail | Hi Lai vs. Tait Marketing Distribution |
| SYN Tech vs. AVer Information | SYN Tech vs. Far EasTone Telecommunications | SYN Tech vs. Transcend Information | SYN Tech vs. Chunghwa Telecom Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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