Correlation Between Symtek Automation and Nan Yang

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

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

Diversification Opportunities for Symtek Automation and Nan Yang

0.28

Correlation Coefficient

Symtek Automation  Nan Yang

Modest diversification

The 3 months correlation between Symtek and Nan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Nan Yang Dyeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Yang Dyeing and Symtek Automation 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 Symtek Automation Asia are associated (or correlated) with Nan Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Yang Dyeing has no effect on the direction of Symtek Automation i.e., Symtek Automation and Nan Yang go up and down completely randomly.

Pair Corralation between Symtek Automation and Nan Yang

Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 2.98 times more return on investment than Nan Yang. However, Symtek Automation is 2.98 times more volatile than Nan Yang Dyeing. It trades about 0.09 of its potential returns per unit of risk. Nan Yang Dyeing is currently generating about -0.04 per unit of risk. If you would invest  8,145  in Symtek Automation Asia on October 21, 2024 and sell it today you would earn a total of  11,955  from holding Symtek Automation Asia or generate 146.78% return on investment over 90 days.

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

Symtek Automation Asia  vs.  Nan Yang Dyeing

Symtek Automation Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symtek Automation Asia 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.

Nan Yang Dyeing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nan Yang Dyeing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nan Yang 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 Symtek Automation and Nan Yang

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

The idea behind Symtek Automation Asia and Nan Yang Dyeing 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.