Correlation Between Leatec Fine and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Leatec Fine and SYN Tech 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 Leatec Fine and SYN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and SYN Tech Chem Pharm, you can compare the effects of market volatilities on Leatec Fine and SYN Tech 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 Leatec Fine with a short position of SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and SYN Tech.
Diversification Opportunities for Leatec Fine and SYN Tech
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leatec and SYN is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem and Leatec Fine 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 Leatec Fine Ceramics are associated (or correlated) with SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Leatec Fine i.e., Leatec Fine and SYN Tech go up and down completely randomly.
Pair Corralation between Leatec Fine and SYN Tech
Assuming the 90 days trading horizon Leatec Fine Ceramics is expected to under-perform the SYN Tech. In addition to that, Leatec Fine is 2.93 times more volatile than SYN Tech Chem Pharm. It trades about -0.35 of its total potential returns per unit of risk. SYN Tech Chem Pharm is currently generating about -0.07 per unit of volatility. If you would invest 9,360 in SYN Tech Chem Pharm on October 28, 2024 and sell it today you would lose (80.00) from holding SYN Tech Chem Pharm or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Leatec Fine Ceramics |
| SYN Tech Chem |
Leatec Fine and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and SYN Tech
The main advantage of trading using opposite Leatec Fine and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.| Leatec Fine vs. WIN Semiconductors | Leatec Fine vs. Visual Photonics Epitaxy | Leatec Fine vs. GlobalWafers Co | Leatec Fine vs. Unimicron Technology Corp |
| SYN Tech vs. SuperAlloy Industrial Co, | SYN Tech vs. Shan Loong Transportation Co | SYN Tech vs. Tex Ray Industrial Co | SYN Tech vs. Emerging Display Technologies |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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