Correlation Between Exchange Listed and Syntax

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

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

Diversification Opportunities for Exchange Listed and Syntax

0.1

Correlation Coefficient

Exchange Listed  Syntax

Average diversification

The 3 months correlation between Exchange and Syntax is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Listed Funds and Syntax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntax and Exchange Listed 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 Exchange Listed Funds are associated (or correlated) with Syntax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntax has no effect on the direction of Exchange Listed i.e., Exchange Listed and Syntax go up and down completely randomly.

Pair Corralation between Exchange Listed and Syntax

Given the investment horizon of 90 days Exchange Listed is expected to generate 1.19 times less return on investment than Syntax. But when comparing it to its historical volatility, Exchange Listed Funds is 1.71 times less risky than Syntax. It trades about 0.07 of its potential returns per unit of risk. Syntax is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,093  in Syntax on October 3, 2024 and sell it today you would earn a total of  502.00  from holding Syntax or generate 12.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.03%
Values	Daily Returns

Exchange Listed Funds  vs.  Syntax

Exchange Listed Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Syntax

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Exchange Listed and Syntax

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

The idea behind Exchange Listed Funds and Syntax 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..