Correlation Between SynCore Biotechnology and First Insurance
Can any of the company-specific risk be diversified away by investing in both SynCore Biotechnology and First Insurance 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 SynCore Biotechnology and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SynCore Biotechnology Co and First Insurance Co, you can compare the effects of market volatilities on SynCore Biotechnology and First Insurance 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 SynCore Biotechnology with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SynCore Biotechnology and First Insurance.
Diversification Opportunities for SynCore Biotechnology and First Insurance
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SynCore and First is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SynCore Biotechnology Co and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and SynCore Biotechnology 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 SynCore Biotechnology Co are associated (or correlated) with First Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Insurance has no effect on the direction of SynCore Biotechnology i.e., SynCore Biotechnology and First Insurance go up and down completely randomly.
Pair Corralation between SynCore Biotechnology and First Insurance
Assuming the 90 days trading horizon SynCore Biotechnology Co is expected to generate 4.88 times more return on investment than First Insurance. However, SynCore Biotechnology is 4.88 times more volatile than First Insurance Co. It trades about 0.07 of its potential returns per unit of risk. First Insurance Co is currently generating about 0.04 per unit of risk. If you would invest 3,395 in SynCore Biotechnology Co on November 7, 2024 and sell it today you would earn a total of 110.00 from holding SynCore Biotechnology Co or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SynCore Biotechnology Co vs. First Insurance Co
Performance |
| Timeline |
| SynCore Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
SynCore Biotechnology and First Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SynCore Biotechnology and First Insurance
The main advantage of trading using opposite SynCore Biotechnology and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SynCore Biotechnology position performs unexpectedly, First Insurance 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 First Insurance will offset losses from the drop in First Insurance's long position.The idea behind SynCore Biotechnology Co and First Insurance Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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