Correlation Between Simat Technologies and AJ Advance

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

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

Diversification Opportunities for Simat Technologies and AJ Advance

-0.44

Correlation Coefficient

Simat Technologies  AJ Advance

Very good diversification

The 3 months correlation between Simat and AJA is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Simat Technologies Public and AJ Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Advance Technology and Simat Technologies 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 Simat Technologies Public are associated (or correlated) with AJ Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Advance Technology has no effect on the direction of Simat Technologies i.e., Simat Technologies and AJ Advance go up and down completely randomly.

Pair Corralation between Simat Technologies and AJ Advance

Assuming the 90 days trading horizon Simat Technologies Public is expected to generate 1.03 times more return on investment than AJ Advance. However, Simat Technologies is 1.03 times more volatile than AJ Advance Technology. It trades about -0.01 of its potential returns per unit of risk. AJ Advance Technology is currently generating about -0.04 per unit of risk. If you would invest  173.00  in Simat Technologies Public on September 15, 2024 and sell it today you would lose (14.00) from holding Simat Technologies Public or give up 8.09% of portfolio value over 90 days.

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

Simat Technologies Public  vs.  AJ Advance Technology

Simat Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

AJ Advance Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AJ Advance Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Simat Technologies and AJ Advance

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

The idea behind Simat Technologies Public and AJ Advance Technology 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.