Correlation Between Neo Neon and SIM Technology
Can any of the company-specific risk be diversified away by investing in both Neo Neon and SIM 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 Neo Neon and SIM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Neon Holdings Limited and SIM Technology Group, you can compare the effects of market volatilities on Neo Neon and SIM 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 Neo Neon with a short position of SIM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Neon and SIM Technology.
Diversification Opportunities for Neo Neon and SIM Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Neo and SIM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Neo Neon Holdings Limited and SIM Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIM Technology Group and Neo Neon 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 Neo Neon Holdings Limited are associated (or correlated) with SIM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIM Technology Group has no effect on the direction of Neo Neon i.e., Neo Neon and SIM Technology go up and down completely randomly.
Pair Corralation between Neo Neon and SIM Technology
Assuming the 90 days trading horizon Neo Neon Holdings Limited is expected to generate 1.12 times more return on investment than SIM Technology. However, Neo Neon is 1.12 times more volatile than SIM Technology Group. It trades about 0.04 of its potential returns per unit of risk. SIM Technology Group is currently generating about -0.01 per unit of risk. If you would invest 136.00 in Neo Neon Holdings Limited on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Neo Neon Holdings Limited or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neo Neon Holdings Limited vs. SIM Technology Group
Performance |
| Timeline |
| Neo Neon Holdings |
| SIM Technology Group |
Neo Neon and SIM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Neon and SIM Technology
The main advantage of trading using opposite Neo Neon and SIM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Neon position performs unexpectedly, SIM 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 SIM Technology will offset losses from the drop in SIM Technology's long position.| Neo Neon vs. ANJI Technology Co | Neo Neon vs. Emerging Display Technologies | Neo Neon vs. U Tech Media Corp | Neo Neon vs. Ruentex Development Co |
| SIM Technology vs. Cal Comp Electronics Public | SIM Technology vs. Neo Neon Holdings Limited | SIM Technology vs. Ju Teng International | SIM Technology vs. Digital China Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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