Correlation Between Research Frontiers and Syntec Optics
Can any of the company-specific risk be diversified away by investing in both Research Frontiers 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 Research Frontiers and Syntec Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Research Frontiers Incorporated and Syntec Optics Holdings, you can compare the effects of market volatilities on Research Frontiers 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 Research Frontiers with a short position of Syntec Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Research Frontiers and Syntec Optics.
Diversification Opportunities for Research Frontiers and Syntec Optics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Research and Syntec is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Research Frontiers Incorporate 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 Research Frontiers 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 Research Frontiers Incorporated 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 Research Frontiers i.e., Research Frontiers and Syntec Optics go up and down completely randomly.
Pair Corralation between Research Frontiers and Syntec Optics
Given the investment horizon of 90 days Research Frontiers Incorporated is expected to generate 0.24 times more return on investment than Syntec Optics. However, Research Frontiers Incorporated is 4.08 times less risky than Syntec Optics. It trades about -0.22 of its potential returns per unit of risk. Syntec Optics Holdings is currently generating about -0.39 per unit of risk. If you would invest 167.00 in Research Frontiers Incorporated on November 5, 2024 and sell it today you would lose (12.00) from holding Research Frontiers Incorporated or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Research Frontiers Incorporate vs. Syntec Optics Holdings
Performance |
| Timeline |
| Research Frontiers |
| Syntec Optics Holdings |
Research Frontiers and Syntec Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Research Frontiers and Syntec Optics
The main advantage of trading using opposite Research Frontiers and Syntec Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Research Frontiers 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.| Research Frontiers vs. Richardson Electronics | Research Frontiers vs. Orion Energy Systems | Research Frontiers vs. RF Industries | Research Frontiers vs. Reading International |
| Syntec Optics vs. Spyre Therapeutics | Syntec Optics vs. Alto Neuroscience, | Syntec Optics vs. Molecular Partners AG | Syntec Optics vs. Amkor Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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