Correlation Between Symtek Automation and China Development
Can any of the company-specific risk be diversified away by investing in both Symtek Automation and China Development 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 China Development 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 China Development Financial, you can compare the effects of market volatilities on Symtek Automation and China Development 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 China Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and China Development.
Diversification Opportunities for Symtek Automation and China Development
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Symtek and China is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and China Development Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Development 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 China Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Development has no effect on the direction of Symtek Automation i.e., Symtek Automation and China Development go up and down completely randomly.
Pair Corralation between Symtek Automation and China Development
Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 3.54 times more return on investment than China Development. However, Symtek Automation is 3.54 times more volatile than China Development Financial. It trades about 0.09 of its potential returns per unit of risk. China Development Financial is currently generating about 0.14 per unit of risk. If you would invest 20,450 in Symtek Automation Asia on August 30, 2024 and sell it today you would earn a total of 1,300 from holding Symtek Automation Asia or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symtek Automation Asia vs. China Development Financial
Performance |
| Timeline |
| Symtek Automation Asia |
| China Development |
Symtek Automation and China Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symtek Automation and China Development
The main advantage of trading using opposite Symtek Automation and China Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, China Development 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 China Development will offset losses from the drop in China Development'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 |
| China Development vs. Cathay Financial Holding | China Development vs. Mega Financial Holding | China Development vs. CTBC Financial Holding | China Development vs. Fubon Financial Holding |
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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