Correlation Between Sunzen Biotech and Sime Darby
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech and Sime Darby 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 Sime Darby 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 Sime Darby Plantation, you can compare the effects of market volatilities on Sunzen Biotech and Sime Darby 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 Sime Darby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Sime Darby.
Diversification Opportunities for Sunzen Biotech and Sime Darby
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunzen and Sime is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech Bhd and Sime Darby Plantation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sime Darby Plantation 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 Sime Darby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sime Darby Plantation has no effect on the direction of Sunzen Biotech i.e., Sunzen Biotech and Sime Darby go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Sime Darby
Assuming the 90 days trading horizon Sunzen Biotech Bhd is expected to generate 0.64 times more return on investment than Sime Darby. However, Sunzen Biotech Bhd is 1.55 times less risky than Sime Darby. It trades about 0.0 of its potential returns per unit of risk. Sime Darby Plantation is currently generating about -0.08 per unit of risk. If you would invest 32.00 in Sunzen Biotech Bhd on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Sunzen Biotech Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Sime Darby Plantation
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Sime Darby Plantation |
Sunzen Biotech and Sime Darby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Sime Darby
The main advantage of trading using opposite Sunzen Biotech and Sime Darby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech position performs unexpectedly, Sime Darby 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 Sime Darby will offset losses from the drop in Sime Darby's long position.| Sunzen Biotech vs. British American Tobacco | Sunzen Biotech vs. FARM FRESH BERHAD | Sunzen Biotech vs. Apollo Food Holdings | Sunzen Biotech vs. Oriental Food Industries |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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