Correlation Between SIMMTECH and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Atinum Investment 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 SIMMTECH and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Atinum Investment Co, you can compare the effects of market volatilities on SIMMTECH and Atinum Investment 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 SIMMTECH with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Atinum Investment.
Diversification Opportunities for SIMMTECH and Atinum Investment
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SIMMTECH and Atinum is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and SIMMTECH 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 SIMMTECH Co are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of SIMMTECH i.e., SIMMTECH and Atinum Investment go up and down completely randomly.
Pair Corralation between SIMMTECH and Atinum Investment
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the Atinum Investment. In addition to that, SIMMTECH is 1.25 times more volatile than Atinum Investment Co. It trades about -0.12 of its total potential returns per unit of risk. Atinum Investment Co is currently generating about -0.05 per unit of volatility. If you would invest 289,386 in Atinum Investment Co on November 3, 2024 and sell it today you would lose (80,386) from holding Atinum Investment Co or give up 27.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
SIMMTECH Co vs. Atinum Investment Co
Performance |
| Timeline |
| SIMMTECH |
| Atinum Investment |
SIMMTECH and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Atinum Investment
The main advantage of trading using opposite SIMMTECH and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| SIMMTECH vs. Global Standard Technology | SIMMTECH vs. Hyundai BNG Steel | SIMMTECH vs. Woori Technology | SIMMTECH vs. iNtRON Biotechnology |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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