Correlation Between Symtek Automation and Information Technology
Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Information Technology 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 Information Technology 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 Information Technology Total, you can compare the effects of market volatilities on Symtek Automation and Information Technology 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 Information Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Information Technology.
Diversification Opportunities for Symtek Automation and Information Technology
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Symtek and Information is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Information Technology Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Technology 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 Information Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Technology has no effect on the direction of Symtek Automation i.e., Symtek Automation and Information Technology go up and down completely randomly.
Pair Corralation between Symtek Automation and Information Technology
Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.32 times more return on investment than Information Technology. However, Symtek Automation is 1.32 times more volatile than Information Technology Total. It trades about 0.12 of its potential returns per unit of risk. Information Technology Total is currently generating about 0.0 per unit of risk. If you would invest 9,905 in Symtek Automation Asia on August 25, 2024 and sell it today you would earn a total of 12,945 from holding Symtek Automation Asia or generate 130.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symtek Automation Asia vs. Information Technology Total
Performance |
| Timeline |
| Symtek Automation Asia |
| Information Technology |
Symtek Automation and Information Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symtek Automation and Information Technology
The main advantage of trading using opposite Symtek Automation and Information Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, Information Technology 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 Information Technology will offset losses from the drop in Information Technology'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 |
| Information Technology vs. Acer E Enabling Service | Information Technology vs. Sysage Technology Co | Information Technology vs. Genesis Technology | Information Technology vs. Syscom Computer Engineering |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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