Correlation Between Falcon Power and Symtek Automation

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

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

Diversification Opportunities for Falcon Power and Symtek Automation

-0.38

Correlation Coefficient

Falcon Power  Symtek Automation

Very good diversification

The 3 months correlation between Falcon and Symtek is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Power Co and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia and Falcon Power 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 Falcon Power Co are associated (or correlated) with Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Falcon Power i.e., Falcon Power and Symtek Automation go up and down completely randomly.

Pair Corralation between Falcon Power and Symtek Automation

Assuming the 90 days trading horizon Falcon Power Co is expected to under-perform the Symtek Automation. But the stock apears to be less risky and, when comparing its historical volatility, Falcon Power Co is 1.17 times less risky than Symtek Automation. The stock trades about 0.0 of its potential returns per unit of risk. The Symtek Automation Asia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,691  in Symtek Automation Asia on September 14, 2024 and sell it today you would earn a total of  11,009  from holding Symtek Automation Asia or generate 143.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Falcon Power Co  vs.  Symtek Automation Asia

Falcon Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Falcon Power Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Falcon Power is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Symtek Automation Asia

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Symtek Automation showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Falcon Power and Symtek Automation

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

The idea behind Falcon Power Co and Symtek Automation Asia 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.