Correlation Between Synnex Corp and Xerox Corp

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

Diversification Opportunities for Synnex Corp and Xerox Corp

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Synnex and Xerox is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Synnex Corp and Xerox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xerox Corp and Synnex Corp 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 Corp are associated (or correlated) with Xerox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xerox Corp has no effect on the direction of Synnex Corp i.e., Synnex Corp and Xerox Corp go up and down completely randomly.

Pair Corralation between Synnex Corp and Xerox Corp

Considering the 90-day investment horizon Synnex Corp is expected to generate 0.81 times more return on investment than Xerox Corp. However, Synnex Corp is 1.23 times less risky than Xerox Corp. It trades about 0.06 of its potential returns per unit of risk. Xerox Corp is currently generating about 0.02 per unit of risk. If you would invest  6,261  in Synnex Corp on May 14, 2022 and sell it today you would earn a total of  3,839  from holding Synnex Corp or generate 61.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Synnex Corp  vs.  Xerox Corp

 Performance (%) 
       Timeline  
Synnex Corp 
Synnex Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Synnex Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Synnex Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Synnex Price Channel

Xerox Corp 
Xerox Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Xerox Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Xerox Corp may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Xerox Price Channel

Synnex Corp and Xerox Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Synnex Corp and Xerox Corp

The main advantage of trading using opposite Synnex Corp and Xerox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synnex Corp position performs unexpectedly, Xerox Corp 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 Xerox Corp will offset losses from the drop in Xerox Corp's long position.
The idea behind Synnex Corp and Xerox Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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