Correlation Between Syntec Optics and 629377CE0

Can any of the company-specific risk be diversified away by investing in both Syntec Optics and 629377CE0 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 629377CE0 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 NRG Energy 575, you can compare the effects of market volatilities on Syntec Optics and 629377CE0 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 629377CE0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Syntec Optics and 629377CE0.

Diversification Opportunities for Syntec Optics and 629377CE0

-0.64

Correlation Coefficient

Syntec Optics  629377CE0

Excellent diversification

The 3 months correlation between Syntec and 629377CE0 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Syntec Optics Holdings and NRG Energy 575 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 575 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 629377CE0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy 575 has no effect on the direction of Syntec Optics i.e., Syntec Optics and 629377CE0 go up and down completely randomly.

Pair Corralation between Syntec Optics and 629377CE0

Given the investment horizon of 90 days Syntec Optics Holdings is expected to generate 109.99 times more return on investment than 629377CE0. However, Syntec Optics is 109.99 times more volatile than NRG Energy 575. It trades about 0.26 of its potential returns per unit of risk. NRG Energy 575 is currently generating about -0.08 per unit of risk. If you would invest  93.00  in Syntec Optics Holdings on October 4, 2024 and sell it today you would earn a total of  159.00  from holding Syntec Optics Holdings or generate 170.97% return on investment over 90 days.

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

Syntec Optics Holdings  vs.  NRG Energy 575

Syntec Optics Holdings

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Syntec Optics Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Syntec Optics showed solid returns over the last few months and may actually be approaching a breakup point.

NRG Energy 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRG Energy 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CE0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Syntec Optics and 629377CE0

The main advantage of trading using opposite Syntec Optics and 629377CE0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Syntec Optics position performs unexpectedly, 629377CE0 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 629377CE0 will offset losses from the drop in 629377CE0's long position.

The idea behind Syntec Optics Holdings and NRG Energy 575 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.