Correlation Between Thermaltake Technology and Syntek Semiconductor

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

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

Diversification Opportunities for Thermaltake Technology and Syntek Semiconductor

0.43

Correlation Coefficient

Thermaltake Technology  Syntek Semiconductor

Very weak diversification

The 3 months correlation between Thermaltake and Syntek is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thermaltake Technology Co and Syntek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntek Semiconductor and Thermaltake Technology 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 Thermaltake Technology Co are associated (or correlated) with Syntek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntek Semiconductor has no effect on the direction of Thermaltake Technology i.e., Thermaltake Technology and Syntek Semiconductor go up and down completely randomly.

Pair Corralation between Thermaltake Technology and Syntek Semiconductor

Assuming the 90 days trading horizon Thermaltake Technology Co is expected to generate 0.85 times more return on investment than Syntek Semiconductor. However, Thermaltake Technology Co is 1.18 times less risky than Syntek Semiconductor. It trades about 0.08 of its potential returns per unit of risk. Syntek Semiconductor Co is currently generating about -0.01 per unit of risk. If you would invest  3,650  in Thermaltake Technology Co on December 1, 2024 and sell it today you would earn a total of  310.00  from holding Thermaltake Technology Co or generate 8.49% return on investment over 90 days.

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

Thermaltake Technology Co  vs.  Syntek Semiconductor Co

Thermaltake Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thermaltake Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thermaltake Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Syntek Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Syntek Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Syntek Semiconductor 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 Thermaltake Technology and Syntek Semiconductor

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

The idea behind Thermaltake Technology Co and Syntek Semiconductor Co 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .