Correlation Between Symphony Environmental and Hershey
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental and Hershey 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 Symphony Environmental and Hershey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and Hershey Co, you can compare the effects of market volatilities on Symphony Environmental and Hershey 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 Symphony Environmental with a short position of Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and Hershey.
Diversification Opportunities for Symphony Environmental and Hershey
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Symphony and Hershey is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Symphony Environmental 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 Symphony Environmental Technologies are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Symphony Environmental i.e., Symphony Environmental and Hershey go up and down completely randomly.
Pair Corralation between Symphony Environmental and Hershey
Assuming the 90 days trading horizon Symphony Environmental Technologies is expected to generate 1.09 times more return on investment than Hershey. However, Symphony Environmental is 1.09 times more volatile than Hershey Co. It trades about -0.08 of its potential returns per unit of risk. Hershey Co is currently generating about -0.09 per unit of risk. If you would invest 360.00 in Symphony Environmental Technologies on October 15, 2024 and sell it today you would lose (45.00) from holding Symphony Environmental Technologies or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Symphony Environmental Technol vs. Hershey Co
Performance |
| Timeline |
| Symphony Environmental |
| Hershey |
Symphony Environmental and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and Hershey
The main advantage of trading using opposite Symphony Environmental and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Symphony Environmental vs. Cairo Communication SpA | Symphony Environmental vs. Ebro Foods | Symphony Environmental vs. Monster Beverage Corp | Symphony Environmental vs. Guild Esports Plc |
| Hershey vs. Verizon Communications | Hershey vs. Universal Display Corp | Hershey vs. Europa Metals | Hershey vs. Empire Metals Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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