Correlation Between Synthomer Plc and One Media
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and One Media 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 Synthomer Plc and One Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and One Media iP, you can compare the effects of market volatilities on Synthomer Plc and One Media 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 Synthomer Plc with a short position of One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and One Media.
Diversification Opportunities for Synthomer Plc and One Media
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Synthomer and One is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP and Synthomer Plc 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 Synthomer plc are associated (or correlated) with One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and One Media go up and down completely randomly.
Pair Corralation between Synthomer Plc and One Media
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the One Media. In addition to that, Synthomer Plc is 1.41 times more volatile than One Media iP. It trades about -0.09 of its total potential returns per unit of risk. One Media iP is currently generating about -0.02 per unit of volatility. If you would invest 644.00 in One Media iP on October 13, 2024 and sell it today you would lose (219.00) from holding One Media iP or give up 34.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Synthomer plc vs. One Media iP
Performance |
| Timeline |
| Synthomer plc |
| One Media iP |
Synthomer Plc and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and One Media
The main advantage of trading using opposite Synthomer Plc and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media's long position.| Synthomer Plc vs. Verizon Communications | Synthomer Plc vs. Elmos Semiconductor SE | Synthomer Plc vs. Qurate Retail Series | Synthomer Plc vs. Ross Stores |
| One Media vs. Various Eateries PLC | One Media vs. Synthomer plc | One Media vs. Ecclesiastical Insurance Office | One Media vs. DFS Furniture PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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