Correlation Between SIMMTECH and Taewoong Logistics
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Taewoong Logistics 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 Taewoong Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Taewoong Logistics CoLtd, you can compare the effects of market volatilities on SIMMTECH and Taewoong Logistics 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 Taewoong Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Taewoong Logistics.
Diversification Opportunities for SIMMTECH and Taewoong Logistics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SIMMTECH and Taewoong is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Taewoong Logistics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taewoong Logistics 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 Taewoong Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taewoong Logistics CoLtd has no effect on the direction of SIMMTECH i.e., SIMMTECH and Taewoong Logistics go up and down completely randomly.
Pair Corralation between SIMMTECH and Taewoong Logistics
Assuming the 90 days trading horizon SIMMTECH Co is expected to generate 3.02 times more return on investment than Taewoong Logistics. However, SIMMTECH is 3.02 times more volatile than Taewoong Logistics CoLtd. It trades about 0.19 of its potential returns per unit of risk. Taewoong Logistics CoLtd is currently generating about 0.0 per unit of risk. If you would invest 1,092,000 in SIMMTECH Co on November 3, 2024 and sell it today you would earn a total of 138,000 from holding SIMMTECH Co or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMMTECH Co vs. Taewoong Logistics CoLtd
Performance |
| Timeline |
| SIMMTECH |
| Taewoong Logistics CoLtd |
SIMMTECH and Taewoong Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Taewoong Logistics
The main advantage of trading using opposite SIMMTECH and Taewoong Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Taewoong Logistics 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 Taewoong Logistics will offset losses from the drop in Taewoong Logistics' 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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