Correlation Between SIMMTECH and NEXTIN
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and NEXTIN 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 NEXTIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and NEXTIN Inc, you can compare the effects of market volatilities on SIMMTECH and NEXTIN 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 NEXTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and NEXTIN.
Diversification Opportunities for SIMMTECH and NEXTIN
Excellent diversification
The 3 months correlation between SIMMTECH and NEXTIN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and NEXTIN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTIN 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 NEXTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTIN Inc has no effect on the direction of SIMMTECH i.e., SIMMTECH and NEXTIN go up and down completely randomly.
Pair Corralation between SIMMTECH and NEXTIN
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the NEXTIN. In addition to that, SIMMTECH is 1.0 times more volatile than NEXTIN Inc. It trades about -0.05 of its total potential returns per unit of risk. NEXTIN Inc is currently generating about 0.02 per unit of volatility. If you would invest 5,241,063 in NEXTIN Inc on August 25, 2024 and sell it today you would earn a total of 378,937 from holding NEXTIN Inc or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
SIMMTECH Co vs. NEXTIN Inc
Performance |
| Timeline |
| SIMMTECH |
| NEXTIN Inc |
SIMMTECH and NEXTIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and NEXTIN
The main advantage of trading using opposite SIMMTECH and NEXTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, NEXTIN 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 NEXTIN will offset losses from the drop in NEXTIN's long position.| SIMMTECH vs. People Technology | SIMMTECH vs. iNtRON Biotechnology | SIMMTECH vs. Hanjin Transportation Co | SIMMTECH vs. Alton Sports CoLtd |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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