Correlation Between Symbotic and New Generation

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

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

Diversification Opportunities for Symbotic and New Generation

-0.07

Correlation Coefficient

Symbotic  New Generation

Good diversification

The 3 months correlation between Symbotic and New is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Symbotic and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer and Symbotic 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 Symbotic are associated (or correlated) with New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of Symbotic i.e., Symbotic and New Generation go up and down completely randomly.

Pair Corralation between Symbotic and New Generation

Considering the 90-day investment horizon Symbotic is expected to under-perform the New Generation. But the stock apears to be less risky and, when comparing its historical volatility, Symbotic is 5.42 times less risky than New Generation. The stock trades about -0.16 of its potential returns per unit of risk. The New Generation Consumer is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.06  in New Generation Consumer on October 6, 2024 and sell it today you would earn a total of  0.02  from holding New Generation Consumer or generate 33.33% return on investment over 90 days.

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

Symbotic  vs.  New Generation Consumer

Symbotic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Symbotic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Symbotic displayed solid returns over the last few months and may actually be approaching a breakup point.

New Generation Consumer

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in New Generation Consumer are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, New Generation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Symbotic and New Generation

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

The idea behind Symbotic and New Generation Consumer 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.