Correlation Between Hotai and Symtek Automation
Can any of the company-specific risk be diversified away by investing in both Hotai and Symtek Automation 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 Hotai and Symtek Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotai Motor Co and Symtek Automation Asia, you can compare the effects of market volatilities on Hotai and Symtek Automation 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 Hotai with a short position of Symtek Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotai and Symtek Automation.
Diversification Opportunities for Hotai and Symtek Automation
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotai and Symtek is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hotai Motor Co and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia and Hotai 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 Hotai Motor Co are associated (or correlated) with Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Hotai i.e., Hotai and Symtek Automation go up and down completely randomly.
Pair Corralation between Hotai and Symtek Automation
Assuming the 90 days trading horizon Hotai Motor Co is expected to under-perform the Symtek Automation. But the stock apears to be less risky and, when comparing its historical volatility, Hotai Motor Co is 2.84 times less risky than Symtek Automation. The stock trades about -0.17 of its potential returns per unit of risk. The Symtek Automation Asia is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20,100 in Symtek Automation Asia on September 1, 2024 and sell it today you would earn a total of 1,100 from holding Symtek Automation Asia or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hotai Motor Co vs. Symtek Automation Asia
Performance |
| Timeline |
| Hotai Motor |
| Symtek Automation Asia |
Hotai and Symtek Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotai and Symtek Automation
The main advantage of trading using opposite Hotai and Symtek Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotai position performs unexpectedly, Symtek Automation 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 Symtek Automation will offset losses from the drop in Symtek Automation's long position.| Hotai vs. President Chain Store | Hotai vs. Formosa Petrochemical Corp | Hotai vs. Cheng Shin Rubber | Hotai vs. Formosa Chemicals Fibre |
| Symtek Automation vs. Sunonwealth Electric Machine | Symtek Automation vs. Rechi Precision Co | Symtek Automation vs. Fittech Co | Symtek Automation vs. C Sun Manufacturing |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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