Correlation Between Lite On and Synnex Technology
Can any of the company-specific risk be diversified away by investing in both Lite On and Synnex Technology 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 Lite On and Synnex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lite On Technology Corp and Synnex Technology International, you can compare the effects of market volatilities on Lite On and Synnex Technology 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 Lite On with a short position of Synnex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lite On and Synnex Technology.
Diversification Opportunities for Lite On and Synnex Technology
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lite and Synnex is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lite On Technology Corp and Synnex Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synnex Technology and Lite On 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 Lite On Technology Corp are associated (or correlated) with Synnex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synnex Technology has no effect on the direction of Lite On i.e., Lite On and Synnex Technology go up and down completely randomly.
Pair Corralation between Lite On and Synnex Technology
Assuming the 90 days trading horizon Lite On is expected to generate 2.02 times less return on investment than Synnex Technology. In addition to that, Lite On is 1.73 times more volatile than Synnex Technology International. It trades about 0.04 of its total potential returns per unit of risk. Synnex Technology International is currently generating about 0.15 per unit of volatility. If you would invest 7,220 in Synnex Technology International on August 28, 2024 and sell it today you would earn a total of 250.00 from holding Synnex Technology International or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lite On Technology Corp vs. Synnex Technology Internationa
Performance |
| Timeline |
| Lite On Technology |
| Synnex Technology |
Lite On and Synnex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lite On and Synnex Technology
The main advantage of trading using opposite Lite On and Synnex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lite On position performs unexpectedly, Synnex Technology 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 Synnex Technology will offset losses from the drop in Synnex Technology's long position.| Lite On vs. Compal Electronics | Lite On vs. Delta Electronics | Lite On vs. Quanta Computer | Lite On vs. Inventec Corp |
| Synnex Technology vs. Compal Electronics | Synnex Technology vs. Quanta Computer | Synnex Technology vs. Inventec Corp | Synnex Technology vs. Lite On Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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