Correlation Between Galaxy Software and Simplo Technology
Can any of the company-specific risk be diversified away by investing in both Galaxy Software and Simplo 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 Galaxy Software and Simplo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Software Services and Simplo Technology Co, you can compare the effects of market volatilities on Galaxy Software and Simplo 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 Galaxy Software with a short position of Simplo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Software and Simplo Technology.
Diversification Opportunities for Galaxy Software and Simplo Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galaxy and Simplo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Software Services and Simplo Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplo Technology and Galaxy Software 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 Galaxy Software Services are associated (or correlated) with Simplo Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplo Technology has no effect on the direction of Galaxy Software i.e., Galaxy Software and Simplo Technology go up and down completely randomly.
Pair Corralation between Galaxy Software and Simplo Technology
Assuming the 90 days trading horizon Galaxy Software Services is expected to generate 2.72 times more return on investment than Simplo Technology. However, Galaxy Software is 2.72 times more volatile than Simplo Technology Co. It trades about 0.08 of its potential returns per unit of risk. Simplo Technology Co is currently generating about 0.13 per unit of risk. If you would invest 13,200 in Galaxy Software Services on December 1, 2024 and sell it today you would earn a total of 600.00 from holding Galaxy Software Services or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Software Services vs. Simplo Technology Co
Performance |
| Timeline |
| Galaxy Software Services |
| Simplo Technology |
Galaxy Software and Simplo Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Software and Simplo Technology
The main advantage of trading using opposite Galaxy Software and Simplo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Software position performs unexpectedly, Simplo 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 Simplo Technology will offset losses from the drop in Simplo Technology's long position.| Galaxy Software vs. Central Reinsurance Corp | Galaxy Software vs. Power Wind Health | Galaxy Software vs. K Way Information | Galaxy Software vs. Fortune Information Systems |
| Simplo Technology vs. Dynapack International Technology | Simplo Technology vs. Catcher Technology Co | Simplo Technology vs. Delta Electronics | Simplo Technology vs. Powertech 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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