Correlation Between Fittech and Symtek Automation

Can any of the company-specific risk be diversified away by investing in both Fittech and Symtek Automation 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 Fittech and Symtek Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fittech Co and Symtek Automation Asia, you can compare the effects of market volatilities on Fittech and Symtek Automation 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 Fittech with a short position of Symtek Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fittech and Symtek Automation.

Diversification Opportunities for Fittech and Symtek Automation

-0.57

Correlation Coefficient

Fittech  Symtek Automation

Excellent diversification

The 3 months correlation between Fittech and Symtek is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fittech Co and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia and Fittech 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 Fittech Co are associated (or correlated) with Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Fittech i.e., Fittech and Symtek Automation go up and down completely randomly.

Pair Corralation between Fittech and Symtek Automation

Assuming the 90 days trading horizon Fittech Co is expected to generate 0.88 times more return on investment than Symtek Automation. However, Fittech Co is 1.13 times less risky than Symtek Automation. It trades about 0.12 of its potential returns per unit of risk. Symtek Automation Asia is currently generating about -0.07 per unit of risk. If you would invest  9,630  in Fittech Co on November 29, 2024 and sell it today you would earn a total of  620.00  from holding Fittech Co or generate 6.44% return on investment over 90 days.

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

Fittech Co  vs.  Symtek Automation Asia

Fittech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fittech 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 March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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.

Pair Trading with Fittech and Symtek Automation

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

The idea behind Fittech Co and Symtek Automation Asia 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.