Correlation Between Simplo Technology and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Feng Ching 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 Simplo Technology and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplo Technology Co and Feng Ching Metal, you can compare the effects of market volatilities on Simplo Technology and Feng Ching 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 Simplo Technology with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Feng Ching.
Diversification Opportunities for Simplo Technology and Feng Ching
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Simplo and Feng is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Simplo 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 Simplo Technology Co are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Simplo Technology i.e., Simplo Technology and Feng Ching go up and down completely randomly.
Pair Corralation between Simplo Technology and Feng Ching
Assuming the 90 days trading horizon Simplo Technology Co is expected to generate 1.39 times more return on investment than Feng Ching. However, Simplo Technology is 1.39 times more volatile than Feng Ching Metal. It trades about 0.24 of its potential returns per unit of risk. Feng Ching Metal is currently generating about -0.05 per unit of risk. If you would invest 34,650 in Simplo Technology Co on August 28, 2024 and sell it today you would earn a total of 4,850 from holding Simplo Technology Co or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. Feng Ching Metal
Performance |
| Timeline |
| Simplo Technology |
| Feng Ching Metal |
Simplo Technology and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Feng Ching
The main advantage of trading using opposite Simplo Technology and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.| Simplo Technology vs. Dynapack International Technology | Simplo Technology vs. Catcher Technology Co | Simplo Technology vs. Delta Electronics | Simplo Technology vs. Powertech Technology |
| Feng Ching vs. Walsin Lihwa Corp | Feng Ching vs. Ta Ya Electric | Feng Ching vs. Hiwin Mikrosystem Corp | Feng Ching vs. Amtran Technology Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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