Correlation Between Syntec Optics and Lakeland Industries

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

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

Diversification Opportunities for Syntec Optics and Lakeland Industries

0.53

Correlation Coefficient

Syntec Optics  Lakeland Industries

Very weak diversification

The 3 months correlation between Syntec and Lakeland is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Syntec Optics Holdings and Lakeland Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Industries and Syntec Optics 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 Syntec Optics Holdings are associated (or correlated) with Lakeland Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Industries has no effect on the direction of Syntec Optics i.e., Syntec Optics and Lakeland Industries go up and down completely randomly.

Pair Corralation between Syntec Optics and Lakeland Industries

Given the investment horizon of 90 days Syntec Optics Holdings is expected to generate 8.74 times more return on investment than Lakeland Industries. However, Syntec Optics is 8.74 times more volatile than Lakeland Industries. It trades about 0.15 of its potential returns per unit of risk. Lakeland Industries is currently generating about 0.21 per unit of risk. If you would invest  128.00  in Syntec Optics Holdings on October 6, 2024 and sell it today you would earn a total of  181.00  from holding Syntec Optics Holdings or generate 141.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Syntec Optics Holdings  vs.  Lakeland Industries

Syntec Optics Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Syntec Optics Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Syntec Optics showed solid returns over the last few months and may actually be approaching a breakup point.

Lakeland Industries

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Industries are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Lakeland Industries exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Syntec Optics and Lakeland Industries

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

The idea behind Syntec Optics Holdings and Lakeland Industries 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.