Correlation Between Pitney Bowes and Synnex

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

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

Diversification Opportunities for Pitney Bowes and Synnex

0.34

Correlation Coefficient

Pitney Bowes  Synnex

Weak diversification

The 3 months correlation between Pitney and Synnex is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes and Synnex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synnex and Pitney Bowes 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 Pitney Bowes are associated (or correlated) with Synnex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synnex has no effect on the direction of Pitney Bowes i.e., Pitney Bowes and Synnex go up and down completely randomly.

Pair Corralation between Pitney Bowes and Synnex

Considering the 90-day investment horizon Pitney Bowes is expected to under-perform the Synnex. In addition to that, Pitney Bowes is 1.62 times more volatile than Synnex. It trades about -0.07 of its total potential returns per unit of risk. Synnex is currently generating about 0.21 per unit of volatility. If you would invest  10,402  in Synnex on January 20, 2024 and sell it today you would earn a total of  930.00  from holding Synnex or generate 8.94% return on investment over 90 days.

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

Pitney Bowes  vs.  Synnex

Pitney Bowes

Risk-Adjusted Performance

0 of 100

Very Weak

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

Synnex

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Synnex are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Synnex may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Pitney Bowes and Synnex

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

The idea behind Pitney Bowes and Synnex 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.