Correlation Between Chailease Holding and Simplo Technology
Can any of the company-specific risk be diversified away by investing in both Chailease Holding 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 Chailease Holding and Simplo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chailease Holding Co and Simplo Technology Co, you can compare the effects of market volatilities on Chailease Holding 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 Chailease Holding with a short position of Simplo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chailease Holding and Simplo Technology.
Diversification Opportunities for Chailease Holding and Simplo Technology
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chailease and Simplo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding 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 Chailease Holding 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 Chailease Holding 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 Chailease Holding i.e., Chailease Holding and Simplo Technology go up and down completely randomly.
Pair Corralation between Chailease Holding and Simplo Technology
Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Simplo Technology. But the stock apears to be less risky and, when comparing its historical volatility, Chailease Holding Co is 1.05 times less risky than Simplo Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Simplo Technology Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 38,850 in Simplo Technology Co on November 5, 2024 and sell it today you would earn a total of 1,100 from holding Simplo Technology Co or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chailease Holding Co vs. Simplo Technology Co
Performance |
| Timeline |
| Chailease Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Simplo Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Chailease Holding and Simplo Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chailease Holding and Simplo Technology
The main advantage of trading using opposite Chailease Holding and Simplo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding 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.The idea behind Chailease Holding Co and Simplo Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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