Correlation Between Simplo Technology and FarGlory Hotel
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and FarGlory Hotel 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 FarGlory Hotel 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 FarGlory Hotel Co, you can compare the effects of market volatilities on Simplo Technology and FarGlory Hotel 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 FarGlory Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and FarGlory Hotel.
Diversification Opportunities for Simplo Technology and FarGlory Hotel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Simplo and FarGlory is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and FarGlory Hotel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarGlory Hotel 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 FarGlory Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarGlory Hotel has no effect on the direction of Simplo Technology i.e., Simplo Technology and FarGlory Hotel go up and down completely randomly.
Pair Corralation between Simplo Technology and FarGlory Hotel
Assuming the 90 days trading horizon Simplo Technology Co is expected to generate 1.19 times more return on investment than FarGlory Hotel. However, Simplo Technology is 1.19 times more volatile than FarGlory Hotel Co. It trades about 0.03 of its potential returns per unit of risk. FarGlory Hotel Co is currently generating about -0.08 per unit of risk. If you would invest 32,400 in Simplo Technology Co on September 2, 2024 and sell it today you would earn a total of 5,300 from holding Simplo Technology Co or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. FarGlory Hotel Co
Performance |
| Timeline |
| Simplo Technology |
| FarGlory Hotel |
Simplo Technology and FarGlory Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and FarGlory Hotel
The main advantage of trading using opposite Simplo Technology and FarGlory Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, FarGlory Hotel 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 FarGlory Hotel will offset losses from the drop in FarGlory Hotel's long position.| Simplo Technology vs. Walsin Lihwa Corp | Simplo Technology vs. Voltronic Power Technology | Simplo Technology vs. Advanced Energy Solution | Simplo Technology vs. Ta Ya Electric |
| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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