Correlation Between United Integrated and Simplo Technology
Can any of the company-specific risk be diversified away by investing in both United Integrated and Simplo Technology 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 United Integrated and Simplo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Integrated Services and Simplo Technology Co, you can compare the effects of market volatilities on United Integrated and Simplo Technology 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 United Integrated with a short position of Simplo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Integrated and Simplo Technology.
Diversification Opportunities for United Integrated and Simplo Technology
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Simplo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Integrated Services and Simplo Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplo Technology and United Integrated 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 United Integrated Services are associated (or correlated) with Simplo Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplo Technology has no effect on the direction of United Integrated i.e., United Integrated and Simplo Technology go up and down completely randomly.
Pair Corralation between United Integrated and Simplo Technology
Assuming the 90 days trading horizon United Integrated Services is expected to generate 0.83 times more return on investment than Simplo Technology. However, United Integrated Services is 1.21 times less risky than Simplo Technology. It trades about 0.47 of its potential returns per unit of risk. Simplo Technology Co is currently generating about 0.17 per unit of risk. If you would invest 33,800 in United Integrated Services on September 1, 2024 and sell it today you would earn a total of 9,050 from holding United Integrated Services or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Integrated Services vs. Simplo Technology Co
Performance |
| Timeline |
| United Integrated |
| Simplo Technology |
United Integrated and Simplo Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Integrated and Simplo Technology
The main advantage of trading using opposite United Integrated and Simplo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Integrated position performs unexpectedly, Simplo Technology 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 Simplo Technology will offset losses from the drop in Simplo Technology's long position.| United Integrated vs. BES Engineering Co | United Integrated vs. Continental Holdings Corp | United Integrated vs. Kee Tai Properties | United Integrated vs. Hung Sheng Construction |
| Simplo Technology vs. Dynapack International Technology | Simplo Technology vs. Catcher Technology Co | Simplo Technology vs. Delta Electronics | Simplo Technology vs. Powertech 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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