Correlation Between Symtek Automation and Roundtop Machinery
Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Roundtop Machinery 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 Roundtop Machinery 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 Roundtop Machinery Industries, you can compare the effects of market volatilities on Symtek Automation and Roundtop Machinery 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 Roundtop Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Roundtop Machinery.
Diversification Opportunities for Symtek Automation and Roundtop Machinery
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Symtek and Roundtop is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Roundtop Machinery Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundtop Machinery 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 Roundtop Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundtop Machinery has no effect on the direction of Symtek Automation i.e., Symtek Automation and Roundtop Machinery go up and down completely randomly.
Pair Corralation between Symtek Automation and Roundtop Machinery
Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.88 times more return on investment than Roundtop Machinery. However, Symtek Automation is 1.88 times more volatile than Roundtop Machinery Industries. It trades about 0.06 of its potential returns per unit of risk. Roundtop Machinery Industries is currently generating about -0.06 per unit of risk. If you would invest 19,900 in Symtek Automation Asia on September 4, 2024 and sell it today you would earn a total of 700.00 from holding Symtek Automation Asia or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symtek Automation Asia vs. Roundtop Machinery Industries
Performance |
| Timeline |
| Symtek Automation Asia |
| Roundtop Machinery |
Symtek Automation and Roundtop Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symtek Automation and Roundtop Machinery
The main advantage of trading using opposite Symtek Automation and Roundtop Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, Roundtop Machinery 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 Roundtop Machinery will offset losses from the drop in Roundtop Machinery's long position.| Symtek Automation vs. Foxsemicon Integrated Technology | Symtek Automation vs. United Integrated Services | Symtek Automation vs. Ennostar | Symtek Automation vs. All Ring Tech |
| Roundtop Machinery vs. Universal Microelectronics Co | Roundtop Machinery vs. AVerMedia Technologies | Roundtop Machinery vs. Symtek Automation Asia | Roundtop Machinery vs. WiseChip Semiconductor |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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