Correlation Between Simplo Technology and United Integrated
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and United Integrated 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 United Integrated 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 United Integrated Services, you can compare the effects of market volatilities on Simplo Technology and United Integrated 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 United Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and United Integrated.
Diversification Opportunities for Simplo Technology and United Integrated
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simplo and United is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and United Integrated Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Integrated 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 United Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Integrated has no effect on the direction of Simplo Technology i.e., Simplo Technology and United Integrated go up and down completely randomly.
Pair Corralation between Simplo Technology and United Integrated
Assuming the 90 days trading horizon Simplo Technology is expected to generate 2.33 times less return on investment than United Integrated. In addition to that, Simplo Technology is 1.21 times more volatile than United Integrated Services. It trades about 0.17 of its total potential returns per unit of risk. United Integrated Services is currently generating about 0.47 per unit of volatility. If you would invest 33,800 in United Integrated Services on September 1, 2024 and sell it today you would earn a total of 9,050 from holding United Integrated Services or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. United Integrated Services
Performance |
| Timeline |
| Simplo Technology |
| United Integrated |
Simplo Technology and United Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and United Integrated
The main advantage of trading using opposite Simplo Technology and United Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, United Integrated 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 United Integrated will offset losses from the drop in United Integrated'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 |
| United Integrated vs. BES Engineering Co | United Integrated vs. Continental Holdings Corp | United Integrated vs. Kee Tai Properties | United Integrated vs. Hung Sheng Construction |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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