Correlation Between Snap and Symtek Automation
Can any of the company-specific risk be diversified away by investing in both Snap and Symtek Automation 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 Snap and Symtek Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Symtek Automation Asia, you can compare the effects of market volatilities on Snap and Symtek Automation 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 Snap with a short position of Symtek Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Symtek Automation.
Diversification Opportunities for Snap and Symtek Automation
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Symtek is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia and Snap 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 Snap Inc are associated (or correlated) with Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Snap i.e., Snap and Symtek Automation go up and down completely randomly.
Pair Corralation between Snap and Symtek Automation
Given the investment horizon of 90 days Snap is expected to generate 1.07 times less return on investment than Symtek Automation. In addition to that, Snap is 1.23 times more volatile than Symtek Automation Asia. It trades about 0.1 of its total potential returns per unit of risk. Symtek Automation Asia is currently generating about 0.13 per unit of volatility. If you would invest 20,450 in Symtek Automation Asia on August 29, 2024 and sell it today you would earn a total of 2,000 from holding Symtek Automation Asia or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Symtek Automation Asia
Performance |
| Timeline |
| Snap Inc |
| Symtek Automation Asia |
Snap and Symtek Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Symtek Automation
The main advantage of trading using opposite Snap and Symtek Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Symtek Automation 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 Symtek Automation will offset losses from the drop in Symtek Automation's long position.The idea behind Snap Inc and Symtek Automation Asia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Symtek Automation vs. Golden Friends | Symtek Automation vs. Sunonwealth Electric Machine | Symtek Automation vs. Rechi Precision Co | Symtek Automation vs. C Sun Manufacturing |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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