Correlation Between Simat Technologies and Silicon Craft

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

Diversification Opportunities for Simat Technologies and Silicon Craft

-0.07

Correlation Coefficient

Simat Technologies  Silicon Craft

Good diversification

The 3 months correlation between Simat and Silicon is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Simat Technologies Public and Silicon Craft Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Craft 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 Silicon Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Craft Technology has no effect on the direction of Simat Technologies i.e., Simat Technologies and Silicon Craft go up and down completely randomly.

Pair Corralation between Simat Technologies and Silicon Craft

Assuming the 90 days trading horizon Simat Technologies Public is expected to generate 1.12 times more return on investment than Silicon Craft. However, Simat Technologies is 1.12 times more volatile than Silicon Craft Technology. It trades about -0.01 of its potential returns per unit of risk. Silicon Craft Technology is currently generating about -0.05 per unit of risk. If you would invest  174.00  in Simat Technologies Public on September 12, 2024 and sell it today you would lose (16.00) from holding Simat Technologies Public or give up 9.2% of portfolio value over 90 days.

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

Simat Technologies Public  vs.  Silicon Craft 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.

Silicon Craft Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silicon Craft Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Simat Technologies and Silicon Craft

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

The idea behind Simat Technologies Public and Silicon Craft 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.