Correlation Between Great China and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Great China and SYN Tech 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 Great China and SYN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great China Metal and SYN Tech Chem Pharm, you can compare the effects of market volatilities on Great China and SYN Tech 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 Great China with a short position of SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great China and SYN Tech.
Diversification Opportunities for Great China and SYN Tech
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and SYN is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Great China Metal and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem and Great China 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 Great China Metal are associated (or correlated) with SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Great China i.e., Great China and SYN Tech go up and down completely randomly.
Pair Corralation between Great China and SYN Tech
Assuming the 90 days trading horizon Great China Metal is expected to under-perform the SYN Tech. But the stock apears to be less risky and, when comparing its historical volatility, Great China Metal is 2.83 times less risky than SYN Tech. The stock trades about 0.0 of its potential returns per unit of risk. The SYN Tech Chem Pharm is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,307 in SYN Tech Chem Pharm on September 2, 2024 and sell it today you would earn a total of 1,523 from holding SYN Tech Chem Pharm or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Great China Metal vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Great China Metal |
| SYN Tech Chem |
Great China and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great China and SYN Tech
The main advantage of trading using opposite Great China and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great China position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.| Great China vs. Basso Industry Corp | Great China vs. Chung Hsin Electric Machinery | Great China vs. TYC Brother Industrial | Great China vs. TECO Electric Machinery |
| SYN Tech vs. Medigen Vaccine Biologics | SYN Tech vs. TaiMed Biologics | SYN Tech vs. Adimmune Corp | SYN Tech vs. PharmaEngine |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |