Correlation Between Eltek and Syntec Optics
Can any of the company-specific risk be diversified away by investing in both Eltek and Syntec Optics 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 Eltek and Syntec Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eltek and Syntec Optics Holdings, you can compare the effects of market volatilities on Eltek and Syntec Optics 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 Eltek with a short position of Syntec Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eltek and Syntec Optics.
Diversification Opportunities for Eltek and Syntec Optics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eltek and Syntec is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and Syntec Optics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntec Optics Holdings and Eltek 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 Eltek are associated (or correlated) with Syntec Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntec Optics Holdings has no effect on the direction of Eltek i.e., Eltek and Syntec Optics go up and down completely randomly.
Pair Corralation between Eltek and Syntec Optics
Given the investment horizon of 90 days Eltek is expected to generate 0.62 times more return on investment than Syntec Optics. However, Eltek is 1.62 times less risky than Syntec Optics. It trades about 0.08 of its potential returns per unit of risk. Syntec Optics Holdings is currently generating about -0.04 per unit of risk. If you would invest 393.00 in Eltek on August 31, 2024 and sell it today you would earn a total of 708.00 from holding Eltek or generate 180.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eltek vs. Syntec Optics Holdings
Performance |
| Timeline |
| Eltek |
| Syntec Optics Holdings |
Eltek and Syntec Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eltek and Syntec Optics
The main advantage of trading using opposite Eltek and Syntec Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eltek position performs unexpectedly, Syntec Optics 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 Syntec Optics will offset losses from the drop in Syntec Optics' long position.| Eltek vs. Methode Electronics | Eltek vs. OSI Systems | Eltek vs. Bel Fuse A | Eltek vs. Richardson Electronics |
| Syntec Optics vs. Deswell Industries | Syntec Optics vs. Vicor | Syntec Optics vs. Eltek | Syntec Optics vs. Flex |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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