Correlation Between Symtek Automation and De Licacy

Can any of the company-specific risk be diversified away by investing in both Symtek Automation and De Licacy 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 De Licacy 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 De Licacy Industrial, you can compare the effects of market volatilities on Symtek Automation and De Licacy 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 De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and De Licacy.

Diversification Opportunities for Symtek Automation and De Licacy

0.1

Correlation Coefficient

Symtek Automation  De Licacy

Average diversification

The 3 months correlation between Symtek and 1464 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial 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 De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Symtek Automation i.e., Symtek Automation and De Licacy go up and down completely randomly.

Pair Corralation between Symtek Automation and De Licacy

Assuming the 90 days trading horizon Symtek Automation Asia is expected to under-perform the De Licacy. In addition to that, Symtek Automation is 1.15 times more volatile than De Licacy Industrial. It trades about -0.03 of its total potential returns per unit of risk. De Licacy Industrial is currently generating about 0.0 per unit of volatility. If you would invest  1,695  in De Licacy Industrial on October 5, 2024 and sell it today you would lose (10.00) from holding De Licacy Industrial or give up 0.59% of portfolio value over 90 days.

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

Symtek Automation Asia  vs.  De Licacy Industrial

Symtek Automation Asia

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 6 (%) 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.

De Licacy Industrial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in De Licacy Industrial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, De Licacy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Symtek Automation and De Licacy

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

The idea behind Symtek Automation Asia and De Licacy Industrial 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 Global Correlations module to find global opportunities by holding instruments from different markets.