Correlation Between Syneos Health and Sotera Health
Can any of the company-specific risk be diversified away by investing in both Syneos Health and Sotera Health 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 Syneos Health and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Syneos Health and Sotera Health Co, you can compare the effects of market volatilities on Syneos Health and Sotera Health 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 Syneos Health with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syneos Health and Sotera Health.
Diversification Opportunities for Syneos Health and Sotera Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Syneos and Sotera is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Syneos Health and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Syneos Health 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 Syneos Health are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Syneos Health i.e., Syneos Health and Sotera Health go up and down completely randomly.
Pair Corralation between Syneos Health and Sotera Health
Given the investment horizon of 90 days Syneos Health is expected to generate 1.07 times less return on investment than Sotera Health. But when comparing it to its historical volatility, Syneos Health is 2.14 times less risky than Sotera Health. It trades about 0.06 of its potential returns per unit of risk. Sotera Health Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 894.00 in Sotera Health Co on August 24, 2024 and sell it today you would earn a total of 388.00 from holding Sotera Health Co or generate 43.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Syneos Health vs. Sotera Health Co
Performance |
| Timeline |
| Syneos Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sotera Health |
Syneos Health and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Syneos Health and Sotera Health
The main advantage of trading using opposite Syneos Health and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syneos Health position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| Syneos Health vs. ICON PLC | Syneos Health vs. Mettler Toledo International | Syneos Health vs. Charles River Laboratories | Syneos Health vs. Laboratory of |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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