Correlation Between Symtek Automation and Lian Hwa
Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Lian Hwa 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 Symtek Automation and Lian Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symtek Automation Asia and Lian Hwa Foods, you can compare the effects of market volatilities on Symtek Automation and Lian Hwa 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 Symtek Automation with a short position of Lian Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Lian Hwa.
Diversification Opportunities for Symtek Automation and Lian Hwa
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Symtek and Lian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Lian Hwa Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lian Hwa Foods and Symtek Automation 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 Symtek Automation Asia are associated (or correlated) with Lian Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lian Hwa Foods has no effect on the direction of Symtek Automation i.e., Symtek Automation and Lian Hwa go up and down completely randomly.
Pair Corralation between Symtek Automation and Lian Hwa
Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.71 times more return on investment than Lian Hwa. However, Symtek Automation is 1.71 times more volatile than Lian Hwa Foods. It trades about 0.18 of its potential returns per unit of risk. Lian Hwa Foods is currently generating about 0.07 per unit of risk. If you would invest 11,687 in Symtek Automation Asia on August 25, 2024 and sell it today you would earn a total of 11,163 from holding Symtek Automation Asia or generate 95.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symtek Automation Asia vs. Lian Hwa Foods
Performance |
| Timeline |
| Symtek Automation Asia |
| Lian Hwa Foods |
Symtek Automation and Lian Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symtek Automation and Lian Hwa
The main advantage of trading using opposite Symtek Automation and Lian Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, Lian Hwa 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 Lian Hwa will offset losses from the drop in Lian Hwa's long position.| Symtek Automation vs. Golden Friends | Symtek Automation vs. Sunonwealth Electric Machine | Symtek Automation vs. Rechi Precision Co | Symtek Automation vs. Fittech Co |
| Lian Hwa vs. Uni President Enterprises Corp | Lian Hwa vs. Taiwan Cement Corp | Lian Hwa vs. Ruentex Development Co | Lian Hwa vs. Symtek Automation Asia |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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