Correlation Between Syntek Semiconductor and New Era
Can any of the company-specific risk be diversified away by investing in both Syntek Semiconductor and New Era 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 Syntek Semiconductor and New Era into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Syntek Semiconductor Co and New Era Electronics, you can compare the effects of market volatilities on Syntek Semiconductor and New Era 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 Syntek Semiconductor with a short position of New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syntek Semiconductor and New Era.
Diversification Opportunities for Syntek Semiconductor and New Era
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Syntek and New is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Syntek Semiconductor Co and New Era Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Electronics and Syntek Semiconductor 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 Syntek Semiconductor Co are associated (or correlated) with New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Electronics has no effect on the direction of Syntek Semiconductor i.e., Syntek Semiconductor and New Era go up and down completely randomly.
Pair Corralation between Syntek Semiconductor and New Era
Assuming the 90 days trading horizon Syntek Semiconductor Co is expected to under-perform the New Era. But the stock apears to be less risky and, when comparing its historical volatility, Syntek Semiconductor Co is 3.65 times less risky than New Era. The stock trades about -0.38 of its potential returns per unit of risk. The New Era Electronics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 12,500 in New Era Electronics on September 4, 2024 and sell it today you would lose (300.00) from holding New Era Electronics or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Syntek Semiconductor Co vs. New Era Electronics
Performance |
| Timeline |
| Syntek Semiconductor |
| New Era Electronics |
Syntek Semiconductor and New Era Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Syntek Semiconductor and New Era
The main advantage of trading using opposite Syntek Semiconductor and New Era positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syntek Semiconductor position performs unexpectedly, New Era 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 New Era will offset losses from the drop in New Era's long position.| Syntek Semiconductor vs. RDC Semiconductor Co | Syntek Semiconductor vs. Chung Hung Steel | Syntek Semiconductor vs. Realtek Semiconductor Corp | Syntek Semiconductor vs. Ever Clear Environmental Eng |
| New Era vs. Unimicron Technology Corp | New Era vs. Nan Ya Printed | New Era vs. Elite Material Co | New Era vs. Compeq Manufacturing Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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