Correlation Between Mayfair Gold and Syntec Optics

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

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

Diversification Opportunities for Mayfair Gold and Syntec Optics

-0.38

Correlation Coefficient

Mayfair Gold  Syntec Optics

Very good diversification

The 3 months correlation between Mayfair and Syntec is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Syntec Optics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntec Optics Holdings and Mayfair Gold 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 Mayfair Gold Corp are associated (or correlated) with Syntec Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntec Optics Holdings has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and Syntec Optics go up and down completely randomly.

Pair Corralation between Mayfair Gold and Syntec Optics

Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Syntec Optics. But the otc stock apears to be less risky and, when comparing its historical volatility, Mayfair Gold Corp is 15.04 times less risky than Syntec Optics. The otc stock trades about -0.39 of its potential returns per unit of risk. The Syntec Optics Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Syntec Optics Holdings on October 1, 2024 and sell it today you would earn a total of  199.00  from holding Syntec Optics Holdings or generate 147.41% return on investment over 90 days.

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

Mayfair Gold Corp  vs.  Syntec Optics Holdings

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Syntec Optics Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Syntec Optics Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Syntec Optics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mayfair Gold and Syntec Optics

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

The idea behind Mayfair Gold Corp and Syntec Optics Holdings 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 Stocks Directory module to find actively traded stocks across global markets.