Correlation Between Simplo Technology and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Posiflex 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 Posiflex 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 Posiflex Technology, you can compare the effects of market volatilities on Simplo Technology and Posiflex 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 Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Posiflex Technology.
Diversification Opportunities for Simplo Technology and Posiflex Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simplo and Posiflex is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex 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 Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of Simplo Technology i.e., Simplo Technology and Posiflex Technology go up and down completely randomly.
Pair Corralation between Simplo Technology and Posiflex Technology
Assuming the 90 days trading horizon Simplo Technology is expected to generate 4.68 times less return on investment than Posiflex Technology. But when comparing it to its historical volatility, Simplo Technology Co is 1.3 times less risky than Posiflex Technology. It trades about 0.14 of its potential returns per unit of risk. Posiflex Technology is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 20,950 in Posiflex Technology on August 31, 2024 and sell it today you would earn a total of 10,400 from holding Posiflex Technology or generate 49.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. Posiflex Technology
Performance |
| Timeline |
| Simplo Technology |
| Posiflex Technology |
Simplo Technology and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Posiflex Technology
The main advantage of trading using opposite Simplo Technology and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Posiflex 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 Posiflex Technology will offset losses from the drop in Posiflex Technology'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 |
| Posiflex Technology vs. United Microelectronics | Posiflex Technology vs. Winbond Electronics Corp | Posiflex Technology vs. Macronix International Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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