Correlation Between Information Technology and Symtek Automation
Can any of the company-specific risk be diversified away by investing in both Information Technology and Symtek Automation 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 Information Technology and Symtek Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Technology Total and Symtek Automation Asia, you can compare the effects of market volatilities on Information Technology and Symtek Automation 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 Information Technology with a short position of Symtek Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Technology and Symtek Automation.
Diversification Opportunities for Information Technology and Symtek Automation
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Information and Symtek is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Information Technology Total and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia and Information Technology 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 Information Technology Total are associated (or correlated) with Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Information Technology i.e., Information Technology and Symtek Automation go up and down completely randomly.
Pair Corralation between Information Technology and Symtek Automation
Assuming the 90 days trading horizon Information Technology is expected to generate 21.86 times less return on investment than Symtek Automation. But when comparing it to its historical volatility, Information Technology Total is 1.24 times less risky than Symtek Automation. It trades about 0.0 of its potential returns per unit of risk. Symtek Automation Asia is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 21,750 in Symtek Automation Asia on August 25, 2024 and sell it today you would earn a total of 1,100 from holding Symtek Automation Asia or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Technology Total vs. Symtek Automation Asia
Performance |
| Timeline |
| Information Technology |
| Symtek Automation Asia |
Information Technology and Symtek Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Technology and Symtek Automation
The main advantage of trading using opposite Information Technology and Symtek Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Technology position performs unexpectedly, Symtek Automation 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 Symtek Automation will offset losses from the drop in Symtek Automation's long position.| Information Technology vs. Acer E Enabling Service | Information Technology vs. Sysage Technology Co | Information Technology vs. Genesis Technology | Information Technology vs. Syscom Computer Engineering |
| Symtek Automation vs. Golden Friends | Symtek Automation vs. Sunonwealth Electric Machine | Symtek Automation vs. Rechi Precision Co | Symtek Automation vs. Fittech Co |
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.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stocks Directory Find actively traded stocks across global markets |