Correlation Between Synaptics Incorporated and WiSA Technologies

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

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

Diversification Opportunities for Synaptics Incorporated and WiSA Technologies

-0.39

Correlation Coefficient

Synaptics Incorporated  WiSA Technologies

Very good diversification

The 3 months correlation between Synaptics and WiSA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Synaptics Incorporated and WiSA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiSA Technologies and Synaptics Incorporated 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 Synaptics Incorporated are associated (or correlated) with WiSA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiSA Technologies has no effect on the direction of Synaptics Incorporated i.e., Synaptics Incorporated and WiSA Technologies go up and down completely randomly.

Pair Corralation between Synaptics Incorporated and WiSA Technologies

Given the investment horizon of 90 days Synaptics Incorporated is expected to generate 1.23 times less return on investment than WiSA Technologies. But when comparing it to its historical volatility, Synaptics Incorporated is 1.77 times less risky than WiSA Technologies. It trades about 0.03 of its potential returns per unit of risk. WiSA Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  171.00  in WiSA Technologies on September 20, 2024 and sell it today you would earn a total of  0.00  from holding WiSA Technologies or generate 0.0% return on investment over 90 days.

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

Synaptics Incorporated  vs.  WiSA Technologies

Synaptics Incorporated

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Synaptics Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Synaptics Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

WiSA Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WiSA Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, WiSA Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Synaptics Incorporated and WiSA Technologies

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

The idea behind Synaptics Incorporated and WiSA Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.