Correlation Between Synnex and Trimble

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Can any of the company-specific risk be diversified away by investing in both Synnex and Trimble 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 and Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synnex and Trimble, you can compare the effects of market volatilities on Synnex and Trimble 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 with a short position of Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synnex and Trimble.

Diversification Opportunities for Synnex and Trimble

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Synnex and Trimble is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Synnex and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble and Synnex 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 are associated (or correlated) with Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Synnex i.e., Synnex and Trimble go up and down completely randomly.

Pair Corralation between Synnex and Trimble

Considering the 90-day investment horizon Synnex is expected to generate 0.77 times more return on investment than Trimble. However, Synnex is 1.29 times less risky than Trimble. It trades about 0.03 of its potential returns per unit of risk. Trimble is currently generating about 0.0 per unit of risk. If you would invest  9,595  in Synnex on December 30, 2023 and sell it today you would earn a total of  1,715  from holding Synnex or generate 17.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Synnex  vs.  Trimble

 Performance 
       Timeline  
Synnex 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
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 April 2024.
Trimble 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Trimble are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Trimble sustained solid returns over the last few months and may actually be approaching a breakup point.

Synnex and Trimble Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Synnex and Trimble

The main advantage of trading using opposite Synnex and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synnex position performs unexpectedly, Trimble 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 Trimble will offset losses from the drop in Trimble's long position.
The idea behind Synnex and Trimble 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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