Correlation Between Symtek Automation and Allis Electric

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Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Allis Electric 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 Allis Electric 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 Allis Electric Co, you can compare the effects of market volatilities on Symtek Automation and Allis Electric 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 Allis Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Allis Electric.

Diversification Opportunities for Symtek Automation and Allis Electric

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Symtek and Allis is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Allis Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allis Electric 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 Allis Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allis Electric has no effect on the direction of Symtek Automation i.e., Symtek Automation and Allis Electric go up and down completely randomly.

Pair Corralation between Symtek Automation and Allis Electric

Assuming the 90 days trading horizon Symtek Automation is expected to generate 1.49 times less return on investment than Allis Electric. But when comparing it to its historical volatility, Symtek Automation Asia is 1.4 times less risky than Allis Electric. It trades about 0.09 of its potential returns per unit of risk. Allis Electric Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,945  in Allis Electric Co on September 12, 2024 and sell it today you would earn a total of  7,755  from holding Allis Electric Co or generate 263.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Symtek Automation Asia  vs.  Allis Electric Co

 Performance 
       Timeline  
Symtek Automation Asia 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Symtek Automation showed solid returns over the last few months and may actually be approaching a breakup point.
Allis Electric 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Allis Electric Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Symtek Automation and Allis Electric Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Symtek Automation and Allis Electric

The main advantage of trading using opposite Symtek Automation and Allis Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, Allis Electric 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 Allis Electric will offset losses from the drop in Allis Electric's long position.
The idea behind Symtek Automation Asia and Allis Electric 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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