Correlation Between Simplo Technology and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Sun Sea 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 Sun Sea 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 Sun Sea Construction, you can compare the effects of market volatilities on Simplo Technology and Sun Sea 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 Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Sun Sea.
Diversification Opportunities for Simplo Technology and Sun Sea
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Simplo and Sun is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction 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 Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Simplo Technology i.e., Simplo Technology and Sun Sea go up and down completely randomly.
Pair Corralation between Simplo Technology and Sun Sea
Assuming the 90 days trading horizon Simplo Technology Co is expected to generate 1.61 times more return on investment than Sun Sea. However, Simplo Technology is 1.61 times more volatile than Sun Sea Construction. It trades about 0.2 of its potential returns per unit of risk. Sun Sea Construction is currently generating about -0.29 per unit of risk. If you would invest 36,250 in Simplo Technology Co on November 28, 2024 and sell it today you would earn a total of 1,650 from holding Simplo Technology Co or generate 4.55% 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. Sun Sea Construction
Performance |
| Timeline |
| Simplo Technology |
| Sun Sea Construction |
Simplo Technology and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Sun Sea
The main advantage of trading using opposite Simplo Technology and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea'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 |
| Sun Sea vs. Prime Oil Chemical | Sun Sea vs. Sporton International | Sun Sea vs. Oriental Union Chemical | Sun Sea vs. Asmedia 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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