Correlation Between Helios Towers and Synthomer Plc

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

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

Diversification Opportunities for Helios Towers and Synthomer Plc

0.66

Correlation Coefficient

Helios Towers  Synthomer Plc

Poor diversification

The 3 months correlation between Helios and Synthomer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Helios Towers Plc and Synthomer plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synthomer plc and Helios Towers 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 Helios Towers Plc are associated (or correlated) with Synthomer Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synthomer plc has no effect on the direction of Helios Towers i.e., Helios Towers and Synthomer Plc go up and down completely randomly.

Pair Corralation between Helios Towers and Synthomer Plc

Assuming the 90 days trading horizon Helios Towers is expected to generate 1.71 times less return on investment than Synthomer Plc. But when comparing it to its historical volatility, Helios Towers Plc is 3.4 times less risky than Synthomer Plc. It trades about 0.16 of its potential returns per unit of risk. Synthomer plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8,480  in Synthomer plc on April 23, 2025 and sell it today you would earn a total of  1,470  from holding Synthomer plc or generate 17.33% return on investment over 90 days.

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

Helios Towers Plc  vs.  Synthomer plc

Helios Towers Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Helios Towers Plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Helios Towers unveiled solid returns over the last few months and may actually be approaching a breakup point.

Synthomer plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Synthomer plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Synthomer Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helios Towers and Synthomer Plc

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

The idea behind Helios Towers Plc and Synthomer plc 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 Global Correlations module to find global opportunities by holding instruments from different markets.