Correlation Between Sunzen Biotech and EA Technique
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech and EA Technique 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 Sunzen Biotech and EA Technique into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunzen Biotech Bhd and EA Technique M, you can compare the effects of market volatilities on Sunzen Biotech and EA Technique 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 Sunzen Biotech with a short position of EA Technique. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and EA Technique.
Diversification Opportunities for Sunzen Biotech and EA Technique
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunzen and 5259 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech Bhd and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M and Sunzen Biotech 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 Sunzen Biotech Bhd are associated (or correlated) with EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Sunzen Biotech i.e., Sunzen Biotech and EA Technique go up and down completely randomly.
Pair Corralation between Sunzen Biotech and EA Technique
Assuming the 90 days trading horizon Sunzen Biotech Bhd is expected to under-perform the EA Technique. But the stock apears to be less risky and, when comparing its historical volatility, Sunzen Biotech Bhd is 1.27 times less risky than EA Technique. The stock trades about -0.1 of its potential returns per unit of risk. The EA Technique M is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 31.00 in EA Technique M on August 26, 2024 and sell it today you would lose (1.00) from holding EA Technique M or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. EA Technique M
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| EA Technique M |
Sunzen Biotech and EA Technique Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and EA Technique
The main advantage of trading using opposite Sunzen Biotech and EA Technique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech position performs unexpectedly, EA Technique 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 EA Technique will offset losses from the drop in EA Technique's long position.The idea behind Sunzen Biotech Bhd and EA Technique M 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.| EA Technique vs. HeiTech Padu Bhd | EA Technique vs. Lysaght Galvanized Steel | EA Technique vs. Digistar Bhd | EA Technique vs. Swift Haulage Bhd |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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