Correlation Between Simplo Technology and Xintec
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Xintec 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 Xintec 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 Xintec, you can compare the effects of market volatilities on Simplo Technology and Xintec 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 Xintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Xintec.
Diversification Opportunities for Simplo Technology and Xintec
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Simplo and Xintec is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec 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 Xintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintec has no effect on the direction of Simplo Technology i.e., Simplo Technology and Xintec go up and down completely randomly.
Pair Corralation between Simplo Technology and Xintec
Assuming the 90 days trading horizon Simplo Technology Co is expected to under-perform the Xintec. But the stock apears to be less risky and, when comparing its historical volatility, Simplo Technology Co is 2.08 times less risky than Xintec. The stock trades about -0.03 of its potential returns per unit of risk. The Xintec is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12,706 in Xintec on September 3, 2024 and sell it today you would earn a total of 6,394 from holding Xintec or generate 50.32% 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. Xintec
Performance |
| Timeline |
| Simplo Technology |
| Xintec |
Simplo Technology and Xintec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Xintec
The main advantage of trading using opposite Simplo Technology and Xintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Xintec 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 Xintec will offset losses from the drop in Xintec's long position.| Simplo Technology vs. Eclat Textile Co | Simplo Technology vs. WiseChip Semiconductor | Simplo Technology vs. Novatek Microelectronics Corp | Simplo Technology vs. Leader Electronics |
| Xintec vs. GameSparcs Co | Xintec vs. International Games System | Xintec vs. Sunfar Computer Co | Xintec vs. Loop Telecommunication International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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