Correlation Between Simplo Technology and Sunmax Biotechnology
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Sunmax Biotechnology 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 Sunmax Biotechnology 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 Sunmax Biotechnology Co, you can compare the effects of market volatilities on Simplo Technology and Sunmax Biotechnology 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 Sunmax Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Sunmax Biotechnology.
Diversification Opportunities for Simplo Technology and Sunmax Biotechnology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Simplo and Sunmax is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax Biotechnology 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 Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of Simplo Technology i.e., Simplo Technology and Sunmax Biotechnology go up and down completely randomly.
Pair Corralation between Simplo Technology and Sunmax Biotechnology
Assuming the 90 days trading horizon Simplo Technology is expected to generate 2.91 times less return on investment than Sunmax Biotechnology. But when comparing it to its historical volatility, Simplo Technology Co is 1.51 times less risky than Sunmax Biotechnology. It trades about 0.04 of its potential returns per unit of risk. Sunmax Biotechnology Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12,724 in Sunmax Biotechnology Co on September 3, 2024 and sell it today you would earn a total of 15,076 from holding Sunmax Biotechnology Co or generate 118.48% 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. Sunmax Biotechnology Co
Performance |
| Timeline |
| Simplo Technology |
| Sunmax Biotechnology |
Simplo Technology and Sunmax Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Sunmax Biotechnology
The main advantage of trading using opposite Simplo Technology and Sunmax Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Sunmax Biotechnology 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 Sunmax Biotechnology will offset losses from the drop in Sunmax Biotechnology'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 |
| Sunmax Biotechnology vs. Symtek Automation Asia | Sunmax Biotechnology vs. WiseChip Semiconductor | Sunmax Biotechnology vs. Novatek Microelectronics Corp | Sunmax Biotechnology vs. Leader Electronics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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