Correlation Between Synchronoss Technologies and NetScout Systems

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

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

Diversification Opportunities for Synchronoss Technologies and NetScout Systems

-0.08

Correlation Coefficient

Synchronoss Technologies  NetScout Systems

Good diversification

The 3 months correlation between Synchronoss and NetScout is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Synchronoss Technologies and NetScout Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetScout Systems and Synchronoss Technologies 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 Synchronoss Technologies are associated (or correlated) with NetScout Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetScout Systems has no effect on the direction of Synchronoss Technologies i.e., Synchronoss Technologies and NetScout Systems go up and down completely randomly.

Pair Corralation between Synchronoss Technologies and NetScout Systems

Given the investment horizon of 90 days Synchronoss Technologies is expected to generate 2.49 times more return on investment than NetScout Systems. However, Synchronoss Technologies is 2.49 times more volatile than NetScout Systems. It trades about 0.03 of its potential returns per unit of risk. NetScout Systems is currently generating about -0.02 per unit of risk. If you would invest  717.00  in Synchronoss Technologies on October 13, 2024 and sell it today you would earn a total of  123.00  from holding Synchronoss Technologies or generate 17.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Synchronoss Technologies  vs.  NetScout Systems

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 weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

NetScout Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetScout Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, NetScout Systems is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Synchronoss Technologies and NetScout Systems

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

The idea behind Synchronoss Technologies and NetScout Systems 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.