Correlation Between Simplo Technology and Amtran Technology

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Can any of the company-specific risk be diversified away by investing in both Simplo Technology and Amtran 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 Simplo Technology and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplo Technology Co and Amtran Technology Co, you can compare the effects of market volatilities on Simplo Technology and Amtran 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 Simplo Technology with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplo Technology and Amtran Technology.

Diversification Opportunities for Simplo Technology and Amtran Technology

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Simplo and Amtran is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Simplo Technology Co and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology and Simplo 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 Simplo Technology Co are associated (or correlated) with Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Simplo Technology i.e., Simplo Technology and Amtran Technology go up and down completely randomly.

Pair Corralation between Simplo Technology and Amtran Technology

Assuming the 90 days trading horizon Simplo Technology is expected to generate 5.62 times less return on investment than Amtran Technology. But when comparing it to its historical volatility, Simplo Technology Co is 1.32 times less risky than Amtran Technology. It trades about 0.01 of its potential returns per unit of risk. Amtran Technology Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,370  in Amtran Technology Co on October 10, 2024 and sell it today you would earn a total of  550.00  from holding Amtran Technology Co or generate 40.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Simplo Technology Co  vs.  Amtran Technology Co

 Performance 
       Timeline  
Simplo Technology 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Simplo Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Simplo Technology showed solid returns over the last few months and may actually be approaching a breakup point.
Amtran Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Simplo Technology and Amtran Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Simplo Technology and Amtran Technology

The main advantage of trading using opposite Simplo Technology and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplo Technology position performs unexpectedly, Amtran 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.
The idea behind Simplo Technology Co and Amtran 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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