Correlation Between Synergie and DLSI

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

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

Diversification Opportunities for Synergie and DLSI

0.38

Correlation Coefficient

Synergie  DLSI

Weak diversification

The 3 months correlation between Synergie and DLSI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Synergie SE and DLSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLSI and Synergie 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 Synergie SE are associated (or correlated) with DLSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLSI has no effect on the direction of Synergie i.e., Synergie and DLSI go up and down completely randomly.

Pair Corralation between Synergie and DLSI

Assuming the 90 days trading horizon Synergie SE is expected to generate 1.46 times more return on investment than DLSI. However, Synergie is 1.46 times more volatile than DLSI. It trades about 0.18 of its potential returns per unit of risk. DLSI is currently generating about -0.16 per unit of risk. If you would invest  2,800  in Synergie SE on September 13, 2024 and sell it today you would earn a total of  220.00  from holding Synergie SE or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Synergie SE  vs.  DLSI

Synergie SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synergie SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Synergie is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DLSI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DLSI 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 basic 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 Synergie and DLSI

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

The idea behind Synergie SE and DLSI 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.