Correlation Between Symtek Automation and Chaheng Precision

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

Diversification Opportunities for Symtek Automation and Chaheng Precision

-0.43

Correlation Coefficient

Symtek Automation  Chaheng Precision

Very good diversification

The 3 months correlation between Symtek and Chaheng is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Chaheng Precision Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaheng Precision 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 Chaheng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaheng Precision has no effect on the direction of Symtek Automation i.e., Symtek Automation and Chaheng Precision go up and down completely randomly.

Pair Corralation between Symtek Automation and Chaheng Precision

Assuming the 90 days trading horizon Symtek Automation Asia is expected to under-perform the Chaheng Precision. In addition to that, Symtek Automation is 2.67 times more volatile than Chaheng Precision Co. It trades about -0.22 of its total potential returns per unit of risk. Chaheng Precision Co is currently generating about 0.01 per unit of volatility. If you would invest  9,200  in Chaheng Precision Co on September 16, 2024 and sell it today you would earn a total of  20.00  from holding Chaheng Precision Co or generate 0.22% return on investment over 90 days.

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

Symtek Automation Asia  vs.  Chaheng Precision Co

Symtek Automation Asia

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 13 (%) 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.

Chaheng Precision

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chaheng Precision Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Chaheng Precision 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 Chaheng Precision

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

The idea behind Symtek Automation Asia and Chaheng Precision Co 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.