Correlation Between S P and Synnex Public

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

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

Diversification Opportunities for S P and Synnex Public

0.21

Correlation Coefficient

S P  Synnex Public

Modest diversification

The 3 months correlation between SPVI and Synnex is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding S P V and Synnex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synnex Public and S P 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 S P V are associated (or correlated) with Synnex Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synnex Public has no effect on the direction of S P i.e., S P and Synnex Public go up and down completely randomly.

Pair Corralation between S P and Synnex Public

Assuming the 90 days trading horizon S P V is expected to generate 36.67 times more return on investment than Synnex Public. However, S P is 36.67 times more volatile than Synnex Public. It trades about 0.08 of its potential returns per unit of risk. Synnex Public is currently generating about 0.05 per unit of risk. If you would invest  260.00  in S P V on September 24, 2024 and sell it today you would lose (81.00) from holding S P V or give up 31.15% of portfolio value over 90 days.

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

S P V  vs.  Synnex Public

S P V

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days S P V has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Synnex Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synnex Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with S P and Synnex Public

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

The idea behind S P V and Synnex Public 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.