Correlation Between SIMMTECH and Cherrybro CoLtd
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Cherrybro CoLtd 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 Cherrybro CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Cherrybro coLtd, you can compare the effects of market volatilities on SIMMTECH and Cherrybro CoLtd 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 Cherrybro CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Cherrybro CoLtd.
Diversification Opportunities for SIMMTECH and Cherrybro CoLtd
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SIMMTECH and Cherrybro is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Cherrybro coLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherrybro coLtd 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 Cherrybro CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherrybro coLtd has no effect on the direction of SIMMTECH i.e., SIMMTECH and Cherrybro CoLtd go up and down completely randomly.
Pair Corralation between SIMMTECH and Cherrybro CoLtd
Assuming the 90 days trading horizon SIMMTECH Co is expected to generate 2.59 times more return on investment than Cherrybro CoLtd. However, SIMMTECH is 2.59 times more volatile than Cherrybro coLtd. It trades about 0.17 of its potential returns per unit of risk. Cherrybro coLtd is currently generating about 0.24 per unit of risk. If you would invest 1,157,000 in SIMMTECH Co on October 24, 2024 and sell it today you would earn a total of 103,000 from holding SIMMTECH Co or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
SIMMTECH Co vs. Cherrybro coLtd
Performance |
| Timeline |
| SIMMTECH |
| Cherrybro coLtd |
SIMMTECH and Cherrybro CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Cherrybro CoLtd
The main advantage of trading using opposite SIMMTECH and Cherrybro CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Cherrybro CoLtd 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 Cherrybro CoLtd will offset losses from the drop in Cherrybro CoLtd's long position.| SIMMTECH vs. Shinsegae Engineering Construction | SIMMTECH vs. Dongbu Insurance Co | SIMMTECH vs. Tuksu Engineering ConstructionLtd | SIMMTECH vs. Seohee Construction Co |
| Cherrybro CoLtd vs. Duksan Hi Metal | Cherrybro CoLtd vs. NewFlex Technology Co | Cherrybro CoLtd vs. Dongbang Transport Logistics | Cherrybro CoLtd vs. Adaptive Plasma Technology |
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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