Correlation Between Symtek Automation and Merida Industry

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

Diversification Opportunities for Symtek Automation and Merida Industry

-0.26

Correlation Coefficient

Symtek Automation  Merida Industry

Very good diversification

The 3 months correlation between Symtek and Merida is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and Merida Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merida Industry 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 Merida Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merida Industry has no effect on the direction of Symtek Automation i.e., Symtek Automation and Merida Industry go up and down completely randomly.

Pair Corralation between Symtek Automation and Merida Industry

Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.16 times more return on investment than Merida Industry. However, Symtek Automation is 1.16 times more volatile than Merida Industry Co. It trades about 0.1 of its potential returns per unit of risk. Merida Industry Co is currently generating about -0.03 per unit of risk. If you would invest  9,530  in Symtek Automation Asia on October 4, 2024 and sell it today you would earn a total of  10,620  from holding Symtek Automation Asia or generate 111.44% 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.  Merida Industry Co

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.

Merida Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Merida Industry Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Symtek Automation and Merida Industry

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

The idea behind Symtek Automation Asia and Merida Industry 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.