Correlation Between Twitter and Sysco

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

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

Diversification Opportunities for Twitter and Sysco

-0.36

Correlation Coefficient

Twitter  Sysco

Very good diversification

The 3 months correlation between Twitter and Sysco is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco and Twitter 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 Twitter are associated (or correlated) with Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Twitter i.e., Twitter and Sysco go up and down completely randomly.

Pair Corralation between Twitter and Sysco

Given the investment horizon of 90 days Twitter is expected to generate 2.78 times more return on investment than Sysco. However, Twitter is 2.78 times more volatile than Sysco. It trades about 0.13 of its potential returns per unit of risk. Sysco is currently generating about 0.0 per unit of risk. If you would invest  3,838  in Twitter on January 25, 2024 and sell it today you would earn a total of  1,532  from holding Twitter or generate 39.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	18.24%
Values	Daily Returns

Twitter  vs.  Sysco

Twitter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twitter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Twitter is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Sysco

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Twitter and Sysco

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

The idea behind Twitter and Sysco 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.