Correlation Between Symtek Automation and U Media

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

Diversification Opportunities for Symtek Automation and U Media

-0.24

Correlation Coefficient

Symtek Automation  U Media

Very good diversification

The 3 months correlation between Symtek and 6470 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications 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 U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Symtek Automation i.e., Symtek Automation and U Media go up and down completely randomly.

Pair Corralation between Symtek Automation and U Media

Assuming the 90 days trading horizon Symtek Automation Asia is expected to under-perform the U Media. But the stock apears to be less risky and, when comparing its historical volatility, Symtek Automation Asia is 1.14 times less risky than U Media. The stock trades about -0.03 of its potential returns per unit of risk. The U Media Communications is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5,470  in U Media Communications on October 5, 2024 and sell it today you would earn a total of  10.00  from holding U Media Communications or generate 0.18% 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.  U Media Communications

Symtek Automation Asia

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 6 (%) 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.

U Media Communications

Risk-Adjusted Performance

2 of 100

Weak

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

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

The idea behind Symtek Automation Asia and U Media Communications 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.