Correlation Between Eastern Technical and SP Syndicate

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

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

Diversification Opportunities for Eastern Technical and SP Syndicate

0.89

Correlation Coefficient

Eastern Technical  SP Syndicate

Very poor diversification

The 3 months correlation between Eastern and SNP is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Technical Engineering and SP Syndicate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Syndicate Public and Eastern Technical 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 Eastern Technical Engineering are associated (or correlated) with SP Syndicate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Syndicate Public has no effect on the direction of Eastern Technical i.e., Eastern Technical and SP Syndicate go up and down completely randomly.

Pair Corralation between Eastern Technical and SP Syndicate

Assuming the 90 days trading horizon Eastern Technical Engineering is expected to generate 48.64 times more return on investment than SP Syndicate. However, Eastern Technical is 48.64 times more volatile than SP Syndicate Public. It trades about 0.04 of its potential returns per unit of risk. SP Syndicate Public is currently generating about -0.09 per unit of risk. If you would invest  117.00  in Eastern Technical Engineering on October 24, 2024 and sell it today you would lose (34.00) from holding Eastern Technical Engineering or give up 29.06% of portfolio value over 90 days.

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

Eastern Technical Engineering  vs.  SP Syndicate Public

Eastern Technical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Technical Engineering 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

SP Syndicate Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SP Syndicate Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Eastern Technical and SP Syndicate

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

The idea behind Eastern Technical Engineering and SP Syndicate 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 Global Correlations module to find global opportunities by holding instruments from different markets.