Correlation Between Simple Mart and Provision Information
Can any of the company-specific risk be diversified away by investing in both Simple Mart and Provision Information 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 Provision Information 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 Provision Information CoLtd, you can compare the effects of market volatilities on Simple Mart and Provision Information 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 Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simple Mart and Provision Information.
Diversification Opportunities for Simple Mart and Provision Information
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simple and Provision is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Simple Mart Retail and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information 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 Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of Simple Mart i.e., Simple Mart and Provision Information go up and down completely randomly.
Pair Corralation between Simple Mart and Provision Information
Assuming the 90 days trading horizon Simple Mart Retail is expected to under-perform the Provision Information. In addition to that, Simple Mart is 1.46 times more volatile than Provision Information CoLtd. It trades about -0.09 of its total potential returns per unit of risk. Provision Information CoLtd is currently generating about -0.05 per unit of volatility. If you would invest 7,460 in Provision Information CoLtd on October 28, 2024 and sell it today you would lose (60.00) from holding Provision Information CoLtd or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simple Mart Retail vs. Provision Information CoLtd
Performance |
| Timeline |
| Simple Mart Retail |
| Provision Information |
Simple Mart and Provision Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simple Mart and Provision Information
The main advantage of trading using opposite Simple Mart and Provision Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simple Mart position performs unexpectedly, Provision Information 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 Provision Information will offset losses from the drop in Provision Information's long position.| Simple Mart vs. Newretail Co | Simple Mart vs. Grand Ocean Retail | Simple Mart vs. Holiday Entertainment Co | Simple Mart vs. Compal Broadband Networks |
| Provision Information vs. Everlight Electronics Co | Provision Information vs. WT Microelectronics Co | Provision Information vs. Phytohealth Corp | Provision Information vs. MedFirst Healthcare Services |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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