Correlation Between Simplo Technology and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Asmedia Technology 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 Asmedia Technology 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 Asmedia Technology, you can compare the effects of market volatilities on Simplo Technology and Asmedia Technology 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 Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Asmedia Technology.
Diversification Opportunities for Simplo Technology and Asmedia Technology
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simplo and Asmedia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia Technology 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 Asmedia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asmedia Technology has no effect on the direction of Simplo Technology i.e., Simplo Technology and Asmedia Technology go up and down completely randomly.
Pair Corralation between Simplo Technology and Asmedia Technology
Assuming the 90 days trading horizon Simplo Technology Co is expected to generate 0.78 times more return on investment than Asmedia Technology. However, Simplo Technology Co is 1.29 times less risky than Asmedia Technology. It trades about 0.17 of its potential returns per unit of risk. Asmedia Technology is currently generating about 0.05 per unit of risk. If you would invest 37,500 in Simplo Technology Co on October 28, 2024 and sell it today you would earn a total of 2,450 from holding Simplo Technology Co or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. Asmedia Technology
Performance |
| Timeline |
| Simplo Technology |
| Asmedia Technology |
Simplo Technology and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Asmedia Technology
The main advantage of trading using opposite Simplo Technology and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Asmedia Technology 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 Asmedia Technology will offset losses from the drop in Asmedia Technology's long position.| Simplo Technology vs. Silergy Corp | Simplo Technology vs. Airtac International Group | Simplo Technology vs. Advantech Co | Simplo Technology vs. Sinbon Electronics Co |
| Asmedia Technology vs. Alchip Technologies | Asmedia Technology vs. Aspeed Technology | Asmedia Technology vs. Silergy Corp | Asmedia Technology vs. Global Unichip 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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