Correlation Between Sunzen Biotech and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on Sunzen Biotech and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Computer Forms.
Diversification Opportunities for Sunzen Biotech and Computer Forms
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunzen and Computer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech Bhd and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms Bhd 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Sunzen Biotech i.e., Sunzen Biotech and Computer Forms go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Computer Forms
Assuming the 90 days trading horizon Sunzen Biotech is expected to generate 7.17 times less return on investment than Computer Forms. But when comparing it to its historical volatility, Sunzen Biotech Bhd is 2.68 times less risky than Computer Forms. It trades about 0.0 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Computer Forms Bhd on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Computer Forms Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Computer Forms Bhd
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Computer Forms Bhd |
Sunzen Biotech and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Computer Forms
The main advantage of trading using opposite Sunzen Biotech and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.| Sunzen Biotech vs. British American Tobacco | Sunzen Biotech vs. FARM FRESH BERHAD | Sunzen Biotech vs. Apollo Food Holdings |
| Computer Forms vs. Star Media Group | Computer Forms vs. Icon Offshore Bhd | Computer Forms vs. Lotte Chemical Titan | Computer Forms vs. CB Industrial Product |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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