Correlation Between Synnex Public and Steel Public
Can any of the company-specific risk be diversified away by investing in both Synnex Public and Steel Public 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 Synnex Public and Steel Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synnex Public and The Steel Public, you can compare the effects of market volatilities on Synnex Public and Steel Public 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 Synnex Public with a short position of Steel Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synnex Public and Steel Public.
Diversification Opportunities for Synnex Public and Steel Public
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synnex and Steel is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Public and The Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Public and Synnex Public 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 Synnex Public are associated (or correlated) with Steel Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Public has no effect on the direction of Synnex Public i.e., Synnex Public and Steel Public go up and down completely randomly.
Pair Corralation between Synnex Public and Steel Public
Assuming the 90 days trading horizon Synnex Public is expected to generate 23.02 times less return on investment than Steel Public. But when comparing it to its historical volatility, Synnex Public is 34.01 times less risky than Steel Public. It trades about 0.12 of its potential returns per unit of risk. The Steel Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 102.00 in The Steel Public on September 1, 2024 and sell it today you would lose (26.00) from holding The Steel Public or give up 25.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synnex Public vs. The Steel Public
Performance |
| Timeline |
| Synnex Public |
| Steel Public |
Synnex Public and Steel Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synnex Public and Steel Public
The main advantage of trading using opposite Synnex Public and Steel Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synnex Public position performs unexpectedly, Steel Public 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 Steel Public will offset losses from the drop in Steel Public's long position.| Synnex Public vs. Com7 PCL | Synnex Public vs. Jay Mart Public | Synnex Public vs. SiS Distribution Public | Synnex Public vs. KCE Electronics Public |
| Steel Public vs. TMT Steel Public | Steel Public vs. Tycoons Worldwide Group | Steel Public vs. Thai German Products Public | Steel Public vs. Siam Steel Service |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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