Correlation Between Symtek Automation and Realtek Semiconductor

Can any of the company-specific risk be diversified away by investing in both Symtek Automation and Realtek 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 Symtek Automation and Realtek Semiconductor 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 Realtek Semiconductor Corp, you can compare the effects of market volatilities on Symtek Automation and Realtek 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 Symtek Automation with a short position of Realtek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symtek Automation and Realtek Semiconductor.

Diversification Opportunities for Symtek Automation and Realtek Semiconductor

-0.09

Correlation Coefficient

Symtek Automation  Realtek Semiconductor

Good diversification

The 3 months correlation between Symtek and Realtek is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Realtek Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realtek Semiconductor 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 Realtek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realtek Semiconductor has no effect on the direction of Symtek Automation i.e., Symtek Automation and Realtek Semiconductor go up and down completely randomly.

Pair Corralation between Symtek Automation and Realtek Semiconductor

Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.31 times more return on investment than Realtek Semiconductor. However, Symtek Automation is 1.31 times more volatile than Realtek Semiconductor Corp. It trades about 0.1 of its potential returns per unit of risk. Realtek Semiconductor Corp is currently generating about 0.06 per unit of risk. If you would invest  9,530  in Symtek Automation Asia on October 4, 2024 and sell it today you would earn a total of  10,620  from holding Symtek Automation Asia or generate 111.44% 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.  Realtek Semiconductor Corp

Symtek Automation Asia

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 9 (%) 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.

Realtek Semiconductor

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Realtek Semiconductor Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Realtek Semiconductor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Symtek Automation and Realtek Semiconductor

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

The idea behind Symtek Automation Asia and Realtek Semiconductor Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.