Correlation Between SIM Technology and Neo Neon
Can any of the company-specific risk be diversified away by investing in both SIM Technology and Neo Neon 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 SIM Technology and Neo Neon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIM Technology Group and Neo Neon Holdings Limited, you can compare the effects of market volatilities on SIM Technology and Neo Neon 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 SIM Technology with a short position of Neo Neon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIM Technology and Neo Neon.
Diversification Opportunities for SIM Technology and Neo Neon
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SIM and Neo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SIM Technology Group and Neo Neon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Neon Holdings and SIM 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 SIM Technology Group are associated (or correlated) with Neo Neon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Neon Holdings has no effect on the direction of SIM Technology i.e., SIM Technology and Neo Neon go up and down completely randomly.
Pair Corralation between SIM Technology and Neo Neon
Assuming the 90 days trading horizon SIM Technology Group is expected to generate 1.16 times more return on investment than Neo Neon. However, SIM Technology is 1.16 times more volatile than Neo Neon Holdings Limited. It trades about 0.1 of its potential returns per unit of risk. Neo Neon Holdings Limited is currently generating about -0.12 per unit of risk. If you would invest 302.00 in SIM Technology Group on October 23, 2024 and sell it today you would earn a total of 7.00 from holding SIM Technology Group or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIM Technology Group vs. Neo Neon Holdings Limited
Performance |
| Timeline |
| SIM Technology Group |
| Neo Neon Holdings |
SIM Technology and Neo Neon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIM Technology and Neo Neon
The main advantage of trading using opposite SIM Technology and Neo Neon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIM Technology position performs unexpectedly, Neo Neon 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 Neo Neon will offset losses from the drop in Neo Neon's long position.| 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 |
| Neo Neon vs. Loop Telecommunication International | Neo Neon vs. Vate Technology Co | Neo Neon vs. ANJI Technology Co | Neo Neon vs. Chicony Power 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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