Correlation Between Symtek Automation and Eastern Media

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

Diversification Opportunities for Symtek Automation and Eastern Media

0.31

Correlation Coefficient

Symtek Automation  Eastern Media

Weak diversification

The 3 months correlation between Symtek and Eastern is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Eastern Media International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Media Intern 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 Eastern Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Media Intern has no effect on the direction of Symtek Automation i.e., Symtek Automation and Eastern Media go up and down completely randomly.

Pair Corralation between Symtek Automation and Eastern Media

Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 3.3 times more return on investment than Eastern Media. However, Symtek Automation is 3.3 times more volatile than Eastern Media International. It trades about -0.01 of its potential returns per unit of risk. Eastern Media International is currently generating about -0.05 per unit of risk. If you would invest  20,408  in Symtek Automation Asia on December 2, 2024 and sell it today you would lose (1,008) from holding Symtek Automation Asia or give up 4.94% of portfolio value over 90 days.

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

Symtek Automation Asia  vs.  Eastern Media International

Symtek Automation Asia

Risk-Adjusted Performance

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 fairly stable basic indicators, Symtek Automation is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Eastern Media Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastern Media International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Eastern Media 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 Eastern Media

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

The idea behind Symtek Automation Asia and Eastern Media International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.