Correlation Between Thunder Tiger and Symtek Automation

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

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

Diversification Opportunities for Thunder Tiger and Symtek Automation

-0.03

Correlation Coefficient

Thunder Tiger  Symtek Automation

Good diversification

The 3 months correlation between Thunder and Symtek is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Tiger Corp 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 Thunder Tiger 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 Thunder Tiger Corp 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 Thunder Tiger i.e., Thunder Tiger and Symtek Automation go up and down completely randomly.

Pair Corralation between Thunder Tiger and Symtek Automation

Assuming the 90 days trading horizon Thunder Tiger is expected to generate 7.49 times less return on investment than Symtek Automation. But when comparing it to its historical volatility, Thunder Tiger Corp is 1.71 times less risky than Symtek Automation. It trades about 0.06 of its potential returns per unit of risk. Symtek Automation Asia is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  11,800  in Symtek Automation Asia on September 4, 2024 and sell it today you would earn a total of  8,800  from holding Symtek Automation Asia or generate 74.58% return on investment over 90 days.

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

Thunder Tiger Corp  vs.  Symtek Automation Asia

Thunder Tiger Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thunder Tiger Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Thunder Tiger may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Symtek Automation Asia

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Symtek Automation Asia are ranked lower than 20 (%) 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 Thunder Tiger and Symtek Automation

The main advantage of trading using opposite Thunder Tiger and Symtek Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Tiger 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 Thunder Tiger Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.