Correlation Between FarGlory Hotel and Simplo Technology
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel 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 FarGlory Hotel and Simplo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarGlory Hotel Co and Simplo Technology Co, you can compare the effects of market volatilities on FarGlory Hotel 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 FarGlory Hotel with a short position of Simplo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Simplo Technology.
Diversification Opportunities for FarGlory Hotel and Simplo Technology
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between FarGlory and Simplo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Simplo Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplo Technology and FarGlory Hotel 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 FarGlory Hotel Co 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 FarGlory Hotel i.e., FarGlory Hotel and Simplo Technology go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Simplo Technology
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the Simplo Technology. But the stock apears to be less risky and, when comparing its historical volatility, FarGlory Hotel Co is 1.19 times less risky than Simplo Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Simplo Technology Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 32,400 in Simplo Technology Co on September 2, 2024 and sell it today you would earn a total of 5,300 from holding Simplo Technology Co or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Simplo Technology Co
Performance |
| Timeline |
| FarGlory Hotel |
| Simplo Technology |
FarGlory Hotel and Simplo Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Simplo Technology
The main advantage of trading using opposite FarGlory Hotel and Simplo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel 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.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel Co |
| Simplo Technology vs. Walsin Lihwa Corp | Simplo Technology vs. Voltronic Power Technology | Simplo Technology vs. Advanced Energy Solution | Simplo Technology vs. Ta Ya Electric |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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