Correlation Between Simplo Technology and Pontex Polyblend
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Pontex Polyblend 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 Pontex Polyblend 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 Pontex Polyblend CoLtd, you can compare the effects of market volatilities on Simplo Technology and Pontex Polyblend 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 Pontex Polyblend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Pontex Polyblend.
Diversification Opportunities for Simplo Technology and Pontex Polyblend
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Simplo and Pontex is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Pontex Polyblend CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pontex Polyblend CoLtd 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 Pontex Polyblend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pontex Polyblend CoLtd has no effect on the direction of Simplo Technology i.e., Simplo Technology and Pontex Polyblend go up and down completely randomly.
Pair Corralation between Simplo Technology and Pontex Polyblend
Assuming the 90 days trading horizon Simplo Technology Co is expected to under-perform the Pontex Polyblend. But the stock apears to be less risky and, when comparing its historical volatility, Simplo Technology Co is 1.61 times less risky than Pontex Polyblend. The stock trades about -0.03 of its potential returns per unit of risk. The Pontex Polyblend CoLtd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,390 in Pontex Polyblend CoLtd on September 2, 2024 and sell it today you would earn a total of 810.00 from holding Pontex Polyblend CoLtd or generate 58.27% 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. Pontex Polyblend CoLtd
Performance |
| Timeline |
| Simplo Technology |
| Pontex Polyblend CoLtd |
Simplo Technology and Pontex Polyblend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and Pontex Polyblend
The main advantage of trading using opposite Simplo Technology and Pontex Polyblend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Pontex Polyblend 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 Pontex Polyblend will offset losses from the drop in Pontex Polyblend's long position.| Simplo Technology vs. Walsin Lihwa Corp | Simplo Technology vs. Advanced Energy Solution | Simplo Technology vs. Ta Ya Electric | Simplo Technology vs. Amtran Technology Co |
| Pontex Polyblend vs. Cheng Shin Rubber | Pontex Polyblend vs. Nankang Rubber Tire | Pontex Polyblend vs. USI Corp | Pontex Polyblend vs. Asia Polymer 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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