Correlation Between Kolon Plastics and Synopex

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and Synopex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Synopex, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Synopex.

Diversification Opportunities for Kolon Plastics and Synopex

KolonSynopexDiversified AwayKolonSynopexDiversified Away100%
0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Kolon and Synopex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics i.e., Kolon Plastics and Synopex go up and down completely randomly.

Pair Corralation between Kolon Plastics and Synopex

Assuming the 90 days trading horizon Kolon Plastics is expected to under-perform the Synopex. But the stock apears to be less risky and, when comparing its historical volatility, Kolon Plastics is 1.62 times less risky than Synopex. The stock trades about -0.02 of its potential returns per unit of risk. The Synopex is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  657,142  in Synopex on October 21, 2024 and sell it today you would lose (48,142) from holding Synopex or give up 7.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Kolon Plastics  vs.  Synopex

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-505
JavaScript chart by amCharts 3.21.15138490 025320
       Timeline  
Kolon Plastics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kolon Plastics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kolon Plastics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan5,0005,5006,0006,5007,000
Synopex 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan5,5006,0006,5007,000

Kolon Plastics and Synopex Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.66-2.74-1.82-0.9-0.01530.871.762.653.53 0.030.040.050.060.07
JavaScript chart by amCharts 3.21.15138490 025320
       Returns  

Pair Trading with Kolon Plastics and Synopex

The main advantage of trading using opposite Kolon Plastics and Synopex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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 Kolon Plastics 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.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
CEOs Directory
Screen CEOs from public companies around the world
Fundamental Analysis
View fundamental data based on most recent published financial statements
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities