Correlation Between Niching Industrial and Symtek Automation

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

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

Diversification Opportunities for Niching Industrial and Symtek Automation

-0.75

Correlation Coefficient

Niching Industrial  Symtek Automation

Pay attention - limited upside

The 3 months correlation between Niching and Symtek is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Niching Industrial and Symtek Automation Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symtek Automation Asia and Niching Industrial 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 Niching Industrial are associated (or correlated) with Symtek Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symtek Automation Asia has no effect on the direction of Niching Industrial i.e., Niching Industrial and Symtek Automation go up and down completely randomly.

Pair Corralation between Niching Industrial and Symtek Automation

Assuming the 90 days trading horizon Niching Industrial is expected to under-perform the Symtek Automation. But the stock apears to be less risky and, when comparing its historical volatility, Niching Industrial is 2.34 times less risky than Symtek Automation. The stock trades about -0.19 of its potential returns per unit of risk. The Symtek Automation Asia is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  13,077  in Symtek Automation Asia on September 20, 2024 and sell it today you would earn a total of  6,423  from holding Symtek Automation Asia or generate 49.12% return on investment over 90 days.

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

Niching Industrial  vs.  Symtek Automation Asia

Niching Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Niching Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Symtek Automation Asia

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Symtek Automation showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Niching Industrial and Symtek Automation

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

The idea behind Niching Industrial and Symtek Automation Asia 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.