Correlation Between Synergetic Auto and Newcity Public

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

By analyzing existing cross correlation between Synergetic Auto Performance and Newcity Public, you can compare the effects of market volatilities on Synergetic Auto and Newcity Public 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 Synergetic Auto with a short position of Newcity Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synergetic Auto and Newcity Public.

Diversification Opportunities for Synergetic Auto and Newcity Public

0.81

Correlation Coefficient

Synergetic Auto  Newcity Public

Very poor diversification

The 3 months correlation between Synergetic and Newcity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Synergetic Auto Performance and Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcity Public and Synergetic Auto 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 Synergetic Auto Performance are associated (or correlated) with Newcity Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcity Public has no effect on the direction of Synergetic Auto i.e., Synergetic Auto and Newcity Public go up and down completely randomly.

Pair Corralation between Synergetic Auto and Newcity Public

Assuming the 90 days trading horizon Synergetic Auto is expected to generate 1.18 times less return on investment than Newcity Public. But when comparing it to its historical volatility, Synergetic Auto Performance is 1.01 times less risky than Newcity Public. It trades about 0.04 of its potential returns per unit of risk. Newcity Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  111.00  in Newcity Public on September 15, 2024 and sell it today you would earn a total of  177.00  from holding Newcity Public or generate 159.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.79%
Values	Daily Returns

Synergetic Auto Performance  vs.  Newcity Public

Synergetic Auto Perf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synergetic Auto Performance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Newcity Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newcity Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Synergetic Auto and Newcity Public

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

The idea behind Synergetic Auto Performance and Newcity Public 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.