Correlation Between Syneos Health and Sotera Health

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

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

Diversification Opportunities for Syneos Health and Sotera Health

-0.41

Correlation Coefficient

Syneos Health  Sotera Health

Very good diversification

The 3 months correlation between Syneos and Sotera is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Syneos Health and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and Syneos Health 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 Syneos Health are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of Syneos Health i.e., Syneos Health and Sotera Health go up and down completely randomly.

Pair Corralation between Syneos Health and Sotera Health

If you would invest  4,231  in Syneos Health on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Syneos Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Syneos Health  vs.  Sotera Health Co

Syneos Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Syneos Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Syneos Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Sotera Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sotera Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Syneos Health and Sotera Health

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

The idea behind Syneos Health and Sotera Health Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.