Correlation Between Synnex Public and TKS Technologies

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

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

Diversification Opportunities for Synnex Public and TKS Technologies

-0.24

Correlation Coefficient

Synnex Public  TKS Technologies

Very good diversification

The 3 months correlation between Synnex and TKS is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Public and TKS Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKS Technologies Public and Synnex Public 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 Synnex Public are associated (or correlated) with TKS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKS Technologies Public has no effect on the direction of Synnex Public i.e., Synnex Public and TKS Technologies go up and down completely randomly.

Pair Corralation between Synnex Public and TKS Technologies

Assuming the 90 days trading horizon Synnex Public is expected to generate 2.17 times more return on investment than TKS Technologies. However, Synnex Public is 2.17 times more volatile than TKS Technologies Public. It trades about -0.03 of its potential returns per unit of risk. TKS Technologies Public is currently generating about -0.35 per unit of risk. If you would invest  1,500  in Synnex Public on September 14, 2024 and sell it today you would lose (70.00) from holding Synnex Public or give up 4.67% of portfolio value over 90 days.

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

Synnex Public  vs.  TKS Technologies Public

Synnex Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synnex Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Synnex Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

TKS Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKS Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Synnex Public and TKS Technologies

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

The idea behind Synnex Public and TKS Technologies Public 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 Global Correlations module to find global opportunities by holding instruments from different markets.