Correlation Between Anam Electronics and Synopex

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

By analyzing existing cross correlation between Anam Electronics Co and Synopex, you can compare the effects of market volatilities on Anam Electronics and Synopex 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 Anam Electronics with a short position of Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anam Electronics and Synopex.

Diversification Opportunities for Anam Electronics and Synopex

0.45

Correlation Coefficient

Anam Electronics  Synopex

Very weak diversification

The 3 months correlation between Anam and Synopex is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Anam Electronics Co and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex and Anam Electronics 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 Anam Electronics Co are associated (or correlated) with Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of Anam Electronics i.e., Anam Electronics and Synopex go up and down completely randomly.

Pair Corralation between Anam Electronics and Synopex

Assuming the 90 days trading horizon Anam Electronics Co is expected to under-perform the Synopex. But the stock apears to be less risky and, when comparing its historical volatility, Anam Electronics Co is 1.96 times less risky than Synopex. The stock trades about -0.03 of its potential returns per unit of risk. The Synopex is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  253,578  in Synopex on October 23, 2024 and sell it today you would earn a total of  357,422  from holding Synopex or generate 140.95% return on investment over 90 days.

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

Anam Electronics Co  vs.  Synopex

Anam Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anam Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Anam Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Synopex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synopex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Synopex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anam Electronics and Synopex

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

The idea behind Anam Electronics Co and Synopex 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..