Correlation Between Connection Technology and Simple Mart
Can any of the company-specific risk be diversified away by investing in both Connection Technology and Simple Mart 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 Connection Technology and Simple Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Connection Technology Systems and Simple Mart Retail, you can compare the effects of market volatilities on Connection Technology and Simple Mart 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 Connection Technology with a short position of Simple Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connection Technology and Simple Mart.
Diversification Opportunities for Connection Technology and Simple Mart
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Connection and Simple is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Connection Technology Systems and Simple Mart Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simple Mart Retail and Connection Technology 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 Connection Technology Systems are associated (or correlated) with Simple Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simple Mart Retail has no effect on the direction of Connection Technology i.e., Connection Technology and Simple Mart go up and down completely randomly.
Pair Corralation between Connection Technology and Simple Mart
Assuming the 90 days trading horizon Connection Technology Systems is expected to under-perform the Simple Mart. In addition to that, Connection Technology is 2.4 times more volatile than Simple Mart Retail. It trades about 0.0 of its total potential returns per unit of risk. Simple Mart Retail is currently generating about 0.01 per unit of volatility. If you would invest 3,988 in Simple Mart Retail on September 12, 2024 and sell it today you would earn a total of 132.00 from holding Simple Mart Retail or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connection Technology Systems vs. Simple Mart Retail
Performance |
| Timeline |
| Connection Technology |
| Simple Mart Retail |
Connection Technology and Simple Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connection Technology and Simple Mart
The main advantage of trading using opposite Connection Technology and Simple Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connection Technology position performs unexpectedly, Simple Mart 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 Simple Mart will offset losses from the drop in Simple Mart's long position.| Connection Technology vs. Simple Mart Retail | Connection Technology vs. Chernan Metal Industrial | Connection Technology vs. Asia Metal Industries | Connection Technology vs. Chi Sheng Chemical |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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