Correlation Between True Public and Synnex Public

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

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

Diversification Opportunities for True Public and Synnex Public

-0.37

Correlation Coefficient

True Public  Synnex Public

Very good diversification

The 3 months correlation between True and Synnex is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding True Public and Synnex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synnex Public and True 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 True Public are associated (or correlated) with Synnex Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synnex Public has no effect on the direction of True Public i.e., True Public and Synnex Public go up and down completely randomly.

Pair Corralation between True Public and Synnex Public

Assuming the 90 days trading horizon True Public is expected to generate 0.8 times more return on investment than Synnex Public. However, True Public is 1.26 times less risky than Synnex Public. It trades about 0.06 of its potential returns per unit of risk. Synnex Public is currently generating about -0.18 per unit of risk. If you would invest  1,110  in True Public on December 29, 2024 and sell it today you would earn a total of  90.00  from holding True Public or generate 8.11% return on investment over 90 days.

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

True Public  vs.  Synnex Public

True Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in True Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, True Public may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Synnex Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Synnex 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with True Public and Synnex Public

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

The idea behind True Public and Synnex 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.