Correlation Between Excellence Optoelectronic and Sysgration

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

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

Diversification Opportunities for Excellence Optoelectronic and Sysgration

0.17

Correlation Coefficient

Excellence Optoelectronic  Sysgration

Average diversification

The 3 months correlation between Excellence and Sysgration is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Excellence Optoelectronic and Sysgration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysgration and Excellence Optoelectronic 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 Excellence Optoelectronic are associated (or correlated) with Sysgration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysgration has no effect on the direction of Excellence Optoelectronic i.e., Excellence Optoelectronic and Sysgration go up and down completely randomly.

Pair Corralation between Excellence Optoelectronic and Sysgration

Assuming the 90 days trading horizon Excellence Optoelectronic is expected to under-perform the Sysgration. But the stock apears to be less risky and, when comparing its historical volatility, Excellence Optoelectronic is 1.16 times less risky than Sysgration. The stock trades about -0.04 of its potential returns per unit of risk. The Sysgration is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,725  in Sysgration on October 7, 2024 and sell it today you would earn a total of  415.00  from holding Sysgration or generate 11.14% return on investment over 90 days.

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

Excellence Optoelectronic  vs.  Sysgration

Excellence Optoelectronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Excellence Optoelectronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Sysgration

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sysgration are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysgration showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Excellence Optoelectronic and Sysgration

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

The idea behind Excellence Optoelectronic and Sysgration 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.