Correlation Between Syntec Optics and Deswell Industries
Can any of the company-specific risk be diversified away by investing in both Syntec Optics and Deswell Industries 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 Syntec Optics and Deswell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Syntec Optics Holdings and Deswell Industries, you can compare the effects of market volatilities on Syntec Optics and Deswell Industries 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 Syntec Optics with a short position of Deswell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syntec Optics and Deswell Industries.
Diversification Opportunities for Syntec Optics and Deswell Industries
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Syntec and Deswell is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Syntec Optics Holdings and Deswell Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deswell Industries and Syntec Optics 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 Syntec Optics Holdings are associated (or correlated) with Deswell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deswell Industries has no effect on the direction of Syntec Optics i.e., Syntec Optics and Deswell Industries go up and down completely randomly.
Pair Corralation between Syntec Optics and Deswell Industries
Given the investment horizon of 90 days Syntec Optics Holdings is expected to under-perform the Deswell Industries. In addition to that, Syntec Optics is 3.77 times more volatile than Deswell Industries. It trades about -0.04 of its total potential returns per unit of risk. Deswell Industries is currently generating about 0.02 per unit of volatility. If you would invest 238.00 in Deswell Industries on August 31, 2024 and sell it today you would earn a total of 29.00 from holding Deswell Industries or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Syntec Optics Holdings vs. Deswell Industries
Performance |
| Timeline |
| Syntec Optics Holdings |
| Deswell Industries |
Syntec Optics and Deswell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Syntec Optics and Deswell Industries
The main advantage of trading using opposite Syntec Optics and Deswell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syntec Optics position performs unexpectedly, Deswell Industries 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 Deswell Industries will offset losses from the drop in Deswell Industries' long position.| Syntec Optics vs. Deswell Industries | Syntec Optics vs. Vicor | Syntec Optics vs. Eltek | Syntec Optics vs. Flex |
| Deswell Industries vs. Ieh Corp | Deswell Industries vs. LGL Group | Deswell Industries vs. Micropac Industries | Deswell Industries vs. SigmaTron International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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