Correlation Between EcoSynthetix and Savaria

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

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

Diversification Opportunities for EcoSynthetix and Savaria

0.35

Correlation Coefficient

EcoSynthetix  Savaria

Weak diversification

The 3 months correlation between EcoSynthetix and Savaria is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding EcoSynthetix and Savaria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savaria and EcoSynthetix 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 EcoSynthetix are associated (or correlated) with Savaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savaria has no effect on the direction of EcoSynthetix i.e., EcoSynthetix and Savaria go up and down completely randomly.

Pair Corralation between EcoSynthetix and Savaria

Assuming the 90 days trading horizon EcoSynthetix is expected to generate 2.1 times less return on investment than Savaria. In addition to that, EcoSynthetix is 1.75 times more volatile than Savaria. It trades about 0.02 of its total potential returns per unit of risk. Savaria is currently generating about 0.06 per unit of volatility. If you would invest  1,391  in Savaria on October 5, 2024 and sell it today you would earn a total of  625.00  from holding Savaria or generate 44.93% return on investment over 90 days.

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

EcoSynthetix  vs.  Savaria

EcoSynthetix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EcoSynthetix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Savaria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Savaria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with EcoSynthetix and Savaria

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

The idea behind EcoSynthetix and Savaria 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.