Correlation Between Capital Ice and SYN Tech

Can any of the company-specific risk be diversified away by investing in both Capital Ice and SYN Tech 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 Capital Ice and SYN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capital Ice 7 and SYN Tech Chem Pharm, you can compare the effects of market volatilities on Capital Ice and SYN Tech 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 Capital Ice with a short position of SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Ice and SYN Tech.

Diversification Opportunities for Capital Ice and SYN Tech

-0.27

Correlation Coefficient

Capital Ice  SYN Tech

Very good diversification

The 3 months correlation between Capital and SYN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Capital Ice 7 and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem and Capital Ice 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 Capital Ice 7 are associated (or correlated) with SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Capital Ice i.e., Capital Ice and SYN Tech go up and down completely randomly.

Pair Corralation between Capital Ice and SYN Tech

Assuming the 90 days trading horizon Capital Ice 7 is expected to generate 0.8 times more return on investment than SYN Tech. However, Capital Ice 7 is 1.25 times less risky than SYN Tech. It trades about 0.1 of its potential returns per unit of risk. SYN Tech Chem Pharm is currently generating about 0.05 per unit of risk. If you would invest  4,113  in Capital Ice 7 on December 2, 2024 and sell it today you would earn a total of  142.00  from holding Capital Ice 7 or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Capital Ice 7  vs.  SYN Tech Chem Pharm

Capital Ice 7

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Ice 7 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Capital Ice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SYN Tech Chem

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SYN Tech Chem Pharm are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SYN Tech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Capital Ice and SYN Tech

The main advantage of trading using opposite Capital Ice and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Ice position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.

The idea behind Capital Ice 7 and SYN Tech Chem Pharm 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.