Correlation Between SIMMTECH and Tesna
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Tesna 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 Tesna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Tesna Inc, you can compare the effects of market volatilities on SIMMTECH and Tesna 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 Tesna. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Tesna.
Diversification Opportunities for SIMMTECH and Tesna
Almost no diversification
The 3 months correlation between SIMMTECH and Tesna is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Tesna Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesna Inc 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 Tesna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesna Inc has no effect on the direction of SIMMTECH i.e., SIMMTECH and Tesna go up and down completely randomly.
Pair Corralation between SIMMTECH and Tesna
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the Tesna. But the stock apears to be less risky and, when comparing its historical volatility, SIMMTECH Co is 1.35 times less risky than Tesna. The stock trades about -0.44 of its potential returns per unit of risk. The Tesna Inc is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,935,000 in Tesna Inc on August 29, 2024 and sell it today you would lose (240,000) from holding Tesna Inc or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMMTECH Co vs. Tesna Inc
Performance |
| Timeline |
| SIMMTECH |
| Tesna Inc |
SIMMTECH and Tesna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Tesna
The main advantage of trading using opposite SIMMTECH and Tesna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Tesna 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 Tesna will offset losses from the drop in Tesna's long position.| SIMMTECH vs. Korea Real Estate | SIMMTECH vs. Korea Ratings Co | SIMMTECH vs. IQuest Co | SIMMTECH vs. Wonbang Tech Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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