Correlation Between Symtek Automation and PharmaEngine

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

Diversification Opportunities for Symtek Automation and PharmaEngine

0.66

Correlation Coefficient

Symtek Automation  PharmaEngine

Poor diversification

The 3 months correlation between Symtek and PharmaEngine is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and PharmaEngine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PharmaEngine 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 PharmaEngine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PharmaEngine has no effect on the direction of Symtek Automation i.e., Symtek Automation and PharmaEngine go up and down completely randomly.

Pair Corralation between Symtek Automation and PharmaEngine

Assuming the 90 days trading horizon Symtek Automation Asia is expected to under-perform the PharmaEngine. In addition to that, Symtek Automation is 1.04 times more volatile than PharmaEngine. It trades about -0.03 of its total potential returns per unit of risk. PharmaEngine is currently generating about 0.19 per unit of volatility. If you would invest  10,000  in PharmaEngine on December 4, 2024 and sell it today you would earn a total of  1,450  from holding PharmaEngine or generate 14.5% return on investment over 90 days.

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

Symtek Automation Asia  vs.  PharmaEngine

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.

PharmaEngine

Risk-Adjusted Performance

OK

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

Pair Trading with Symtek Automation and PharmaEngine

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

The idea behind Symtek Automation Asia and PharmaEngine 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 Stocks Directory module to find actively traded stocks across global markets.