Correlation Between SYN Tech and Giant Manufacturing
Can any of the company-specific risk be diversified away by investing in both SYN Tech and Giant Manufacturing 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 SYN Tech and Giant Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYN Tech Chem Pharm and Giant Manufacturing Co, you can compare the effects of market volatilities on SYN Tech and Giant Manufacturing 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 SYN Tech with a short position of Giant Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYN Tech and Giant Manufacturing.
Diversification Opportunities for SYN Tech and Giant Manufacturing
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SYN and Giant is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SYN Tech Chem Pharm and Giant Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giant Manufacturing and SYN Tech 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 SYN Tech Chem Pharm are associated (or correlated) with Giant Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giant Manufacturing has no effect on the direction of SYN Tech i.e., SYN Tech and Giant Manufacturing go up and down completely randomly.
Pair Corralation between SYN Tech and Giant Manufacturing
Assuming the 90 days trading horizon SYN Tech Chem Pharm is expected to generate 0.51 times more return on investment than Giant Manufacturing. However, SYN Tech Chem Pharm is 1.98 times less risky than Giant Manufacturing. It trades about 0.09 of its potential returns per unit of risk. Giant Manufacturing Co is currently generating about -0.48 per unit of risk. If you would invest 9,530 in SYN Tech Chem Pharm on August 25, 2024 and sell it today you would earn a total of 170.00 from holding SYN Tech Chem Pharm or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYN Tech Chem Pharm vs. Giant Manufacturing Co
Performance |
| Timeline |
| SYN Tech Chem |
| Giant Manufacturing |
SYN Tech and Giant Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYN Tech and Giant Manufacturing
The main advantage of trading using opposite SYN Tech and Giant Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYN Tech position performs unexpectedly, Giant Manufacturing 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 Giant Manufacturing will offset losses from the drop in Giant Manufacturing's long position.| SYN Tech vs. Trade Van Information Services | SYN Tech vs. Hi Lai Foods Co | SYN Tech vs. Simple Mart Retail | SYN Tech vs. Grand Ocean Retail |
| Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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