Correlation Between Synnex Public and Intouch Holdings

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

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

Diversification Opportunities for Synnex Public and Intouch Holdings

0.31

Correlation Coefficient

Synnex Public  Intouch Holdings

Weak diversification

The 3 months correlation between Synnex and Intouch is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Public and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings Public and Synnex Public 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 Synnex Public are associated (or correlated) with Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of Synnex Public i.e., Synnex Public and Intouch Holdings go up and down completely randomly.

Pair Corralation between Synnex Public and Intouch Holdings

Assuming the 90 days trading horizon Synnex Public is expected to generate 0.81 times more return on investment than Intouch Holdings. However, Synnex Public is 1.23 times less risky than Intouch Holdings. It trades about -0.02 of its potential returns per unit of risk. Intouch Holdings Public is currently generating about -0.02 per unit of risk. If you would invest  1,500  in Synnex Public on September 13, 2024 and sell it today you would lose (30.00) from holding Synnex Public or give up 2.0% of portfolio value over 90 days.

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

Synnex Public  vs.  Intouch Holdings Public

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 somewhat strong fundamental drivers, Synnex Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Intouch Holdings Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intouch Holdings Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intouch Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Synnex Public and Intouch Holdings

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

The idea behind Synnex Public and Intouch Holdings 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.