Correlation Between Simplo Technology and WinMate Communication
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and WinMate Communication 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 WinMate Communication 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 WinMate Communication INC, you can compare the effects of market volatilities on Simplo Technology and WinMate Communication 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 WinMate Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and WinMate Communication.
Diversification Opportunities for Simplo Technology and WinMate Communication
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Simplo and WinMate is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and WinMate Communication INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinMate Communication INC 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 WinMate Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinMate Communication INC has no effect on the direction of Simplo Technology i.e., Simplo Technology and WinMate Communication go up and down completely randomly.
Pair Corralation between Simplo Technology and WinMate Communication
Assuming the 90 days trading horizon Simplo Technology is expected to generate 1.13 times less return on investment than WinMate Communication. In addition to that, Simplo Technology is 2.31 times more volatile than WinMate Communication INC. It trades about 0.14 of its total potential returns per unit of risk. WinMate Communication INC is currently generating about 0.38 per unit of volatility. If you would invest 13,800 in WinMate Communication INC on August 31, 2024 and sell it today you would earn a total of 1,450 from holding WinMate Communication INC or generate 10.51% 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. WinMate Communication INC
Performance |
| Timeline |
| Simplo Technology |
| WinMate Communication INC |
Simplo Technology and WinMate Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and WinMate Communication
The main advantage of trading using opposite Simplo Technology and WinMate Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, WinMate Communication 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 WinMate Communication will offset losses from the drop in WinMate Communication'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 |
| WinMate Communication vs. Advantech Co | WinMate Communication vs. IEI Integration Corp | WinMate Communication vs. Flytech Technology Co | WinMate Communication vs. Ennoconn Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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