Correlation Between Synnex Technology and Advantech
Can any of the company-specific risk be diversified away by investing in both Synnex Technology and Advantech 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 Synnex Technology and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synnex Technology International and Advantech Co, you can compare the effects of market volatilities on Synnex Technology and Advantech 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 Synnex Technology with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synnex Technology and Advantech.
Diversification Opportunities for Synnex Technology and Advantech
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synnex and Advantech is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Technology Internationa and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and Synnex Technology 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 Synnex Technology International are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of Synnex Technology i.e., Synnex Technology and Advantech go up and down completely randomly.
Pair Corralation between Synnex Technology and Advantech
Assuming the 90 days trading horizon Synnex Technology International is expected to under-perform the Advantech. But the stock apears to be less risky and, when comparing its historical volatility, Synnex Technology International is 3.69 times less risky than Advantech. The stock trades about -0.12 of its potential returns per unit of risk. The Advantech Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 37,450 in Advantech Co on November 28, 2024 and sell it today you would earn a total of 3,150 from holding Advantech Co or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synnex Technology Internationa vs. Advantech Co
Performance |
| Timeline |
| Synnex Technology |
| Advantech |
Synnex Technology and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synnex Technology and Advantech
The main advantage of trading using opposite Synnex Technology and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synnex Technology position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| Synnex Technology vs. Compal Electronics | Synnex Technology vs. Quanta Computer | Synnex Technology vs. Inventec Corp | Synnex Technology vs. Lite On Technology Corp |
| Advantech vs. Delta Electronics | Advantech vs. Quanta Computer | Advantech vs. Realtek Semiconductor Corp | Advantech vs. President Chain Store |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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