Correlation Between Bowhead Specialty and SYN Prop

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

By analyzing existing cross correlation between Bowhead Specialty Holdings and SYN prop e, you can compare the effects of market volatilities on Bowhead Specialty and SYN Prop 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 Bowhead Specialty with a short position of SYN Prop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and SYN Prop.

Diversification Opportunities for Bowhead Specialty and SYN Prop

-0.02

Correlation Coefficient

Bowhead Specialty  SYN Prop

Good diversification

The 3 months correlation between Bowhead and SYN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and SYN prop e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN prop e and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with SYN Prop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN prop e has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and SYN Prop go up and down completely randomly.

Pair Corralation between Bowhead Specialty and SYN Prop

Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to under-perform the SYN Prop. But the stock apears to be less risky and, when comparing its historical volatility, Bowhead Specialty Holdings is 13.51 times less risky than SYN Prop. The stock trades about -0.26 of its potential returns per unit of risk. The SYN prop e is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  153.00  in SYN prop e on October 10, 2024 and sell it today you would earn a total of  373.00  from holding SYN prop e or generate 243.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Bowhead Specialty Holdings  vs.  SYN prop e

Bowhead Specialty

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bowhead Specialty Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bowhead Specialty showed solid returns over the last few months and may actually be approaching a breakup point.

SYN prop e

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SYN prop e are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SYN Prop showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bowhead Specialty and SYN Prop

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

The idea behind Bowhead Specialty Holdings and SYN prop e 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.