Correlation Between Simplo Technology and BH Global
Can any of the company-specific risk be diversified away by investing in both Simplo Technology and BH Global 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 BH Global 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 BH Global, you can compare the effects of market volatilities on Simplo Technology and BH Global 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 BH Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and BH Global.
Diversification Opportunities for Simplo Technology and BH Global
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Simplo and 911608 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and BH Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Global 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 BH Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Global has no effect on the direction of Simplo Technology i.e., Simplo Technology and BH Global go up and down completely randomly.
Pair Corralation between Simplo Technology and BH Global
Assuming the 90 days trading horizon Simplo Technology is expected to generate 2.4 times less return on investment than BH Global. But when comparing it to its historical volatility, Simplo Technology Co is 1.7 times less risky than BH Global. It trades about 0.14 of its potential returns per unit of risk. BH Global is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 322.00 in BH Global on September 12, 2024 and sell it today you would earn a total of 66.00 from holding BH Global or generate 20.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplo Technology Co vs. BH Global
Performance |
| Timeline |
| Simplo Technology |
| BH Global |
Simplo Technology and BH Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplo Technology and BH Global
The main advantage of trading using opposite Simplo Technology and BH Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, BH Global 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 BH Global will offset losses from the drop in BH Global's long position.| Simplo Technology vs. Voltronic Power Technology | Simplo Technology vs. Advanced Energy Solution | Simplo Technology vs. Amtran Technology Co |
| BH Global vs. Voltronic Power Technology | BH Global vs. Advanced Energy Solution | BH Global vs. Simplo Technology Co | BH Global vs. Amtran Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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