Correlation Between K One and SFP Tech
Can any of the company-specific risk be diversified away by investing in both K One and SFP Tech 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 K One and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K One Technology Bhd and SFP Tech Holdings, you can compare the effects of market volatilities on K One and SFP Tech 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 K One with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of K One and SFP Tech.
Diversification Opportunities for K One and SFP Tech
Poor diversification
The 3 months correlation between 0111 and SFP is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding K One Technology Bhd and SFP Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFP Tech Holdings and K One 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 K One Technology Bhd are associated (or correlated) with SFP Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFP Tech Holdings has no effect on the direction of K One i.e., K One and SFP Tech go up and down completely randomly.
Pair Corralation between K One and SFP Tech
Assuming the 90 days trading horizon K One Technology Bhd is expected to under-perform the SFP Tech. In addition to that, K One is 2.0 times more volatile than SFP Tech Holdings. It trades about -0.01 of its total potential returns per unit of risk. SFP Tech Holdings is currently generating about 0.03 per unit of volatility. If you would invest 66.00 in SFP Tech Holdings on November 2, 2024 and sell it today you would earn a total of 3.00 from holding SFP Tech Holdings or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K One Technology Bhd vs. SFP Tech Holdings
Performance |
| Timeline |
| K One Technology |
| SFP Tech Holdings |
K One and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K One and SFP Tech
The main advantage of trading using opposite K One and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K One position performs unexpectedly, SFP Tech 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 SFP Tech will offset losses from the drop in SFP Tech's long position.| K One vs. Homeritz Bhd | K One vs. Binasat Communications Bhd | K One vs. Steel Hawk Berhad | K One vs. Cosmos Technology International |
| SFP Tech vs. Public Packages Holdings | SFP Tech vs. Kluang Rubber | SFP Tech vs. Kossan Rubber Industries | SFP Tech vs. Petronas Chemicals Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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