Correlation Between C Media and Syntek Semiconductor

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

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

Diversification Opportunities for C Media and Syntek Semiconductor

0.24

Correlation Coefficient

C Media  Syntek Semiconductor

Modest diversification

The 3 months correlation between 6237 and Syntek is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Syntek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntek Semiconductor and C Media 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 C Media Electronics 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 C Media i.e., C Media and Syntek Semiconductor go up and down completely randomly.

Pair Corralation between C Media and Syntek Semiconductor

Assuming the 90 days trading horizon C Media Electronics is expected to generate 1.15 times more return on investment than Syntek Semiconductor. However, C Media is 1.15 times more volatile than Syntek Semiconductor Co. It trades about 0.03 of its potential returns per unit of risk. Syntek Semiconductor Co is currently generating about 0.03 per unit of risk. If you would invest  4,652  in C Media Electronics on October 11, 2024 and sell it today you would earn a total of  1,018  from holding C Media Electronics or generate 21.88% return on investment over 90 days.

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

C Media Electronics  vs.  Syntek Semiconductor Co

C Media Electronics

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in C Media Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, C Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Syntek Semiconductor

Risk-Adjusted Performance

0 of 100

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with C Media and Syntek Semiconductor

The main advantage of trading using opposite C Media and Syntek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media 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 C Media Electronics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.