Correlation Between Secureworks Corp and Synchronoss Technologies

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

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

Diversification Opportunities for Secureworks Corp and Synchronoss Technologies

-0.6

Correlation Coefficient

Secureworks Corp  Synchronoss Technologies

Excellent diversification

The 3 months correlation between Secureworks and Synchronoss is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Secureworks Corp and Synchronoss Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchronoss Technologies and Secureworks Corp 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 Secureworks Corp are associated (or correlated) with Synchronoss Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchronoss Technologies has no effect on the direction of Secureworks Corp i.e., Secureworks Corp and Synchronoss Technologies go up and down completely randomly.

Pair Corralation between Secureworks Corp and Synchronoss Technologies

Given the investment horizon of 90 days Secureworks Corp is expected to generate 0.4 times more return on investment than Synchronoss Technologies. However, Secureworks Corp is 2.52 times less risky than Synchronoss Technologies. It trades about -0.04 of its potential returns per unit of risk. Synchronoss Technologies is currently generating about -0.18 per unit of risk. If you would invest  885.00  in Secureworks Corp on September 28, 2024 and sell it today you would lose (39.00) from holding Secureworks Corp or give up 4.41% of portfolio value over 90 days.

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

Secureworks Corp  vs.  Synchronoss Technologies

Secureworks Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Secureworks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Secureworks Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Synchronoss Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synchronoss Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Secureworks Corp and Synchronoss Technologies

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

The idea behind Secureworks Corp and Synchronoss Technologies 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.