Correlation Between Simplo Technology and New Advanced
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and New Advanced 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 New Advanced 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 New Advanced Electronics, you can compare the effects of market volatilities on Simplo Technology and New Advanced 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 New Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and New Advanced.
Diversification Opportunities for Simplo Technology and New Advanced
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Simplo and New is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and New Advanced Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Advanced Electronics 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 New Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Advanced Electronics has no effect on the direction of Simplo Technology i.e., Simplo Technology and New Advanced go up and down completely randomly.
Pair Corralation between Simplo Technology and New Advanced
Assuming the 90 days trading horizon Simplo Technology Co is expected to generate 1.4 times more return on investment than New Advanced. However, Simplo Technology is 1.4 times more volatile than New Advanced Electronics. It trades about 0.13 of its potential returns per unit of risk. New Advanced Electronics is currently generating about -0.09 per unit of risk. If you would invest 35,850 in Simplo Technology Co on September 13, 2024 and sell it today you would earn a total of 2,750 from holding Simplo Technology Co or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. New Advanced Electronics
Performance |
| Timeline |
| Simplo Technology |
| New Advanced Electronics |
Simplo Technology and New Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and New Advanced
The main advantage of trading using opposite Simplo Technology and New Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, New Advanced 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 New Advanced will offset losses from the drop in New Advanced'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 |
| New Advanced vs. Holiday Entertainment Co | New Advanced vs. Posiflex Technology | New Advanced vs. United Radiant Technology | New Advanced vs. Chicony Power Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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