Correlation Between SIM Technology and Unizyx Holding

Can any of the company-specific risk be diversified away by investing in both SIM Technology and Unizyx Holding 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 Unizyx Holding 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 Unizyx Holding Corp, you can compare the effects of market volatilities on SIM Technology and Unizyx Holding 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 Unizyx Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIM Technology and Unizyx Holding.

Diversification Opportunities for SIM Technology and Unizyx Holding

-0.16

Correlation Coefficient

SIM Technology  Unizyx Holding

Good diversification

The 3 months correlation between SIM and Unizyx is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SIM Technology Group and Unizyx Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unizyx Holding Corp 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 Unizyx Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unizyx Holding Corp has no effect on the direction of SIM Technology i.e., SIM Technology and Unizyx Holding go up and down completely randomly.

Pair Corralation between SIM Technology and Unizyx Holding

Assuming the 90 days trading horizon SIM Technology Group is expected to generate 0.32 times more return on investment than Unizyx Holding. However, SIM Technology Group is 3.11 times less risky than Unizyx Holding. It trades about -0.22 of its potential returns per unit of risk. Unizyx Holding Corp is currently generating about -0.17 per unit of risk. If you would invest  310.00  in SIM Technology Group on October 13, 2024 and sell it today you would lose (10.00) from holding SIM Technology Group or give up 3.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

SIM Technology Group  vs.  Unizyx Holding Corp

SIM Technology Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIM Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SIM Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Unizyx Holding Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unizyx Holding Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Unizyx Holding 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 SIM Technology and Unizyx Holding

The main advantage of trading using opposite SIM Technology and Unizyx Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIM Technology position performs unexpectedly, Unizyx Holding 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 Unizyx Holding will offset losses from the drop in Unizyx Holding's long position.

The idea behind SIM Technology Group and Unizyx Holding Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.