Correlation Between Simple Mart and Azion
Can any of the company-specific risk be diversified away by investing in both Simple Mart and Azion 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 Simple Mart and Azion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simple Mart Retail and Azion, you can compare the effects of market volatilities on Simple Mart and Azion 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 Simple Mart with a short position of Azion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simple Mart and Azion.
Diversification Opportunities for Simple Mart and Azion
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simple and Azion is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Simple Mart Retail and Azion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azion and Simple Mart 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 Simple Mart Retail are associated (or correlated) with Azion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azion has no effect on the direction of Simple Mart i.e., Simple Mart and Azion go up and down completely randomly.
Pair Corralation between Simple Mart and Azion
Assuming the 90 days trading horizon Simple Mart Retail is expected to generate 0.53 times more return on investment than Azion. However, Simple Mart Retail is 1.9 times less risky than Azion. It trades about -0.01 of its potential returns per unit of risk. Azion is currently generating about -0.05 per unit of risk. If you would invest 4,435 in Simple Mart Retail on September 4, 2024 and sell it today you would lose (225.00) from holding Simple Mart Retail or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simple Mart Retail vs. Azion
Performance |
| Timeline |
| Simple Mart Retail |
| Azion |
Simple Mart and Azion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simple Mart and Azion
The main advantage of trading using opposite Simple Mart and Azion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simple Mart position performs unexpectedly, Azion 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 Azion will offset losses from the drop in Azion's long position.| Simple Mart vs. Taiwan Semiconductor Manufacturing | Simple Mart vs. Hon Hai Precision | Simple Mart vs. MediaTek | Simple Mart vs. Chunghwa Telecom Co |
| Azion vs. International CSRC Investment | Azion vs. Nan Ya Plastics | Azion vs. Formosan Rubber Group | Azion vs. China Metal Products |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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