Correlation Between Synergetic Auto and Sriracha Construction

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

Diversification Opportunities for Synergetic Auto and Sriracha Construction

0.84

Correlation Coefficient

Synergetic Auto  Sriracha Construction

Very poor diversification

The 3 months correlation between Synergetic and Sriracha is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Synergetic Auto Performance and Sriracha Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriracha Construction 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 Sriracha Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriracha Construction has no effect on the direction of Synergetic Auto i.e., Synergetic Auto and Sriracha Construction go up and down completely randomly.

Pair Corralation between Synergetic Auto and Sriracha Construction

Assuming the 90 days trading horizon Synergetic Auto Performance is expected to under-perform the Sriracha Construction. In addition to that, Synergetic Auto is 1.1 times more volatile than Sriracha Construction Public. It trades about -0.18 of its total potential returns per unit of risk. Sriracha Construction Public is currently generating about -0.2 per unit of volatility. If you would invest  660.00  in Sriracha Construction Public on September 17, 2024 and sell it today you would lose (160.00) from holding Sriracha Construction Public or give up 24.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Synergetic Auto Performance  vs.  Sriracha Construction 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.

Sriracha Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sriracha Construction 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 forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Synergetic Auto and Sriracha Construction

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

The idea behind Synergetic Auto Performance and Sriracha Construction 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.