Correlation Between Symtek Automation and Posiflex Technology

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

Diversification Opportunities for Symtek Automation and Posiflex Technology

0.2

Correlation Coefficient

Symtek Automation  Posiflex Technology

Modest diversification

The 3 months correlation between Symtek and Posiflex is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex Technology 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 Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of Symtek Automation i.e., Symtek Automation and Posiflex Technology go up and down completely randomly.

Pair Corralation between Symtek Automation and Posiflex Technology

Assuming the 90 days trading horizon Symtek Automation is expected to generate 5.27 times less return on investment than Posiflex Technology. In addition to that, Symtek Automation is 1.48 times more volatile than Posiflex Technology. It trades about 0.03 of its total potential returns per unit of risk. Posiflex Technology is currently generating about 0.22 per unit of volatility. If you would invest  32,100  in Posiflex Technology on October 4, 2024 and sell it today you would earn a total of  3,350  from holding Posiflex Technology or generate 10.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Symtek Automation Asia  vs.  Posiflex Technology

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.

Posiflex Technology

Risk-Adjusted Performance

24 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Posiflex Technology are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Posiflex Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Symtek Automation and Posiflex Technology

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

The idea behind Symtek Automation Asia and Posiflex Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.