Correlation Between Helios and Synchronoss Technologies

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

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

Diversification Opportunities for Helios and Synchronoss Technologies

-0.14

Correlation Coefficient

Helios  Synchronoss Technologies

Good diversification

The 3 months correlation between Helios and Synchronoss is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Helios and Matheson and Synchronoss Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchronoss Technologies and Helios 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 Helios and Matheson are associated (or correlated) with Synchronoss Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchronoss Technologies has no effect on the direction of Helios i.e., Helios and Synchronoss Technologies go up and down completely randomly.

Pair Corralation between Helios and Synchronoss Technologies

Given the investment horizon of 90 days Helios and Matheson is expected to under-perform the Synchronoss Technologies. In addition to that, Helios is 4.19 times more volatile than Synchronoss Technologies. It trades about -0.35 of its total potential returns per unit of risk. Synchronoss Technologies is currently generating about 0.04 per unit of volatility. If you would invest  711.00  in Synchronoss Technologies on October 20, 2024 and sell it today you would earn a total of  306.00  from holding Synchronoss Technologies or generate 43.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.62%
Values	Daily Returns

Helios and Matheson  vs.  Synchronoss Technologies

Helios and Matheson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helios and Matheson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Helios is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Synchronoss Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synchronoss Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Synchronoss Technologies is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Helios and Synchronoss Technologies

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

The idea behind Helios and Matheson and Synchronoss Technologies 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.