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
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SIM and Neo is 0.35. 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 under-perform the Neo Neon. But the stock apears to be less risky and, when comparing its historical volatility, SIM Technology Group is 1.12 times less risky than Neo Neon. The stock trades about -0.01 of its potential returns per unit of risk. The Neo Neon Holdings Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 |
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. ANJI Technology Co | Neo Neon vs. Emerging Display Technologies | Neo Neon vs. U Tech Media Corp | Neo Neon vs. Ruentex Development 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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