Correlation Between Knowles Cor and Synnex
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and Synnex 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 Knowles Cor and Synnex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Synnex, you can compare the effects of market volatilities on Knowles Cor and Synnex 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 Knowles Cor with a short position of Synnex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Synnex.
Diversification Opportunities for Knowles Cor and Synnex
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knowles and Synnex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Synnex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synnex and Knowles Cor 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 Knowles Cor are associated (or correlated) with Synnex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synnex has no effect on the direction of Knowles Cor i.e., Knowles Cor and Synnex go up and down completely randomly.
Pair Corralation between Knowles Cor and Synnex
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 1.2 times less return on investment than Synnex. In addition to that, Knowles Cor is 1.38 times more volatile than Synnex. It trades about 0.02 of its total potential returns per unit of risk. Synnex is currently generating about 0.04 per unit of volatility. If you would invest 9,388 in Synnex on August 28, 2024 and sell it today you would earn a total of 2,709 from holding Synnex or generate 28.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. Synnex
Performance |
| Timeline |
| Knowles Cor |
| Synnex |
Knowles Cor and Synnex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and Synnex
The main advantage of trading using opposite Knowles Cor and Synnex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, Synnex 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 Synnex will offset losses from the drop in Synnex's long position.| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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