Correlation Between Sun Sea and Simplo Technology
Can any of the company-specific risk be diversified away by investing in both Sun Sea 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 Sun Sea and Simplo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Sea Construction and Simplo Technology Co, you can compare the effects of market volatilities on Sun Sea 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 Sun Sea with a short position of Simplo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Sea and Simplo Technology.
Diversification Opportunities for Sun Sea and Simplo Technology
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Simplo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sun Sea Construction and Simplo Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplo Technology and Sun Sea 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 Sun Sea Construction 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 Sun Sea i.e., Sun Sea and Simplo Technology go up and down completely randomly.
Pair Corralation between Sun Sea and Simplo Technology
Assuming the 90 days trading horizon Sun Sea Construction is expected to under-perform the Simplo Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sun Sea Construction is 1.61 times less risky than Simplo Technology. The stock trades about -0.29 of its potential returns per unit of risk. The Simplo Technology Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 36,250 in Simplo Technology Co on November 28, 2024 and sell it today you would earn a total of 1,650 from holding Simplo Technology Co or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Sea Construction vs. Simplo Technology Co
Performance |
| Timeline |
| Sun Sea Construction |
| Simplo Technology |
Sun Sea and Simplo Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Sea and Simplo Technology
The main advantage of trading using opposite Sun Sea and Simplo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Sea 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.| Sun Sea vs. Prime Oil Chemical | Sun Sea vs. Sporton International | Sun Sea vs. Oriental Union Chemical | Sun Sea vs. Asmedia Technology |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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