Correlation Between Amtran Technology and Simplo Technology

Can any of the company-specific risk be diversified away by investing in both Amtran Technology 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 Amtran Technology and Simplo Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amtran Technology Co and Simplo Technology Co, you can compare the effects of market volatilities on Amtran Technology 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 Amtran Technology with a short position of Simplo Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtran Technology and Simplo Technology.

Diversification Opportunities for Amtran Technology and Simplo Technology

-0.28

Correlation Coefficient

Amtran Technology  Simplo Technology

Very good diversification

The 3 months correlation between Amtran and Simplo is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Amtran Technology Co and Simplo Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplo Technology and Amtran 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 Amtran Technology Co 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 Amtran Technology i.e., Amtran Technology and Simplo Technology go up and down completely randomly.

Pair Corralation between Amtran Technology and Simplo Technology

Assuming the 90 days trading horizon Amtran Technology Co is expected to under-perform the Simplo Technology. But the stock apears to be less risky and, when comparing its historical volatility, Amtran Technology Co is 1.11 times less risky than Simplo Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Simplo Technology Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  39,400  in Simplo Technology Co on December 30, 2024 and sell it today you would lose (1,300) from holding Simplo Technology Co or give up 3.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amtran Technology Co  vs.  Simplo Technology Co

Amtran Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amtran Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Simplo Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simplo Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Simplo Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Amtran Technology and Simplo Technology

The main advantage of trading using opposite Amtran Technology and Simplo Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtran Technology 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.

The idea behind Amtran Technology Co and Simplo Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.