Correlation Between Simplo Technology and Song Ho
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Song Ho 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 Song Ho 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 Song Ho Industrial, you can compare the effects of market volatilities on Simplo Technology and Song Ho 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 Song Ho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Song Ho.
Diversification Opportunities for Simplo Technology and Song Ho
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Simplo and Song is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Song Ho Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Ho Industrial 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 Song Ho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Ho Industrial has no effect on the direction of Simplo Technology i.e., Simplo Technology and Song Ho go up and down completely randomly.
Pair Corralation between Simplo Technology and Song Ho
Assuming the 90 days trading horizon Simplo Technology Co is expected to generate 5.42 times more return on investment than Song Ho. However, Simplo Technology is 5.42 times more volatile than Song Ho Industrial. It trades about 0.16 of its potential returns per unit of risk. Song Ho Industrial is currently generating about 0.1 per unit of risk. If you would invest 34,250 in Simplo Technology Co on August 30, 2024 and sell it today you would earn a total of 3,400 from holding Simplo Technology Co or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. Song Ho Industrial
Performance |
| Timeline |
| Simplo Technology |
| Song Ho Industrial |
Simplo Technology and Song Ho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Song Ho
The main advantage of trading using opposite Simplo Technology and Song Ho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Song Ho 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 Song Ho will offset losses from the drop in Song Ho'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 |
| Song Ho vs. Shinkong Insurance Co | Song Ho vs. Genovate Biotechnology Co | Song Ho vs. Johnson Health Tech | Song Ho vs. CHC Healthcare Group |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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