Correlation Between Symtek Automation and First Steamship

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

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

Diversification Opportunities for Symtek Automation and First Steamship

0.64

Correlation Coefficient

Symtek Automation  First Steamship

Poor diversification

The 3 months correlation between Symtek and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Symtek Automation Asia and First Steamship Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Steamship and Symtek Automation 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 Symtek Automation Asia are associated (or correlated) with First Steamship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Steamship has no effect on the direction of Symtek Automation i.e., Symtek Automation and First Steamship go up and down completely randomly.

Pair Corralation between Symtek Automation and First Steamship

Assuming the 90 days trading horizon Symtek Automation Asia is expected to generate 1.77 times more return on investment than First Steamship. However, Symtek Automation is 1.77 times more volatile than First Steamship Co. It trades about 0.27 of its potential returns per unit of risk. First Steamship Co is currently generating about 0.08 per unit of risk. If you would invest  11,600  in Symtek Automation Asia on September 5, 2024 and sell it today you would earn a total of  9,100  from holding Symtek Automation Asia or generate 78.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Symtek Automation Asia  vs.  First Steamship Co

Symtek Automation Asia

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 21 (%) 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.

First Steamship

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Steamship Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, First Steamship may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Symtek Automation and First Steamship

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

The idea behind Symtek Automation Asia and First Steamship Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..