Correlation Between Symtek Automation and Nankang Rubber
Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Nankang Rubber 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 Nankang Rubber 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 Nankang Rubber Tire, you can compare the effects of market volatilities on Symtek Automation and Nankang Rubber 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 Nankang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Nankang Rubber.
Diversification Opportunities for Symtek Automation and Nankang Rubber
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Symtek and Nankang is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Nankang Rubber Tire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nankang Rubber Tire 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 Nankang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nankang Rubber Tire has no effect on the direction of Symtek Automation i.e., Symtek Automation and Nankang Rubber go up and down completely randomly.
Pair Corralation between Symtek Automation and Nankang Rubber
Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.85 times more return on investment than Nankang Rubber. However, Symtek Automation is 1.85 times more volatile than Nankang Rubber Tire. It trades about 0.08 of its potential returns per unit of risk. Nankang Rubber Tire is currently generating about -0.08 per unit of risk. If you would invest 17,535 in Symtek Automation Asia on October 5, 2024 and sell it today you would earn a total of 2,615 from holding Symtek Automation Asia or generate 14.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Symtek Automation Asia vs. Nankang Rubber Tire
Performance |
Timeline |
Symtek Automation Asia |
Nankang Rubber Tire |
Symtek Automation and Nankang Rubber Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Symtek Automation and Nankang Rubber
The main advantage of trading using opposite Symtek Automation and Nankang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symtek Automation position performs unexpectedly, Nankang Rubber 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 Nankang Rubber will offset losses from the drop in Nankang Rubber's long position.Symtek Automation vs. Foxsemicon Integrated Technology | Symtek Automation vs. United Integrated Services | Symtek Automation vs. Ennostar | Symtek Automation vs. All Ring Tech |
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Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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