Correlation Between Sunzen Biotech and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech and Lysaght Galvanized 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 Lysaght Galvanized 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 Lysaght Galvanized Steel, you can compare the effects of market volatilities on Sunzen Biotech and Lysaght Galvanized 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 Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Lysaght Galvanized.
Diversification Opportunities for Sunzen Biotech and Lysaght Galvanized
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunzen and Lysaght is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech Bhd and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel 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 Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of Sunzen Biotech i.e., Sunzen Biotech and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Lysaght Galvanized
Assuming the 90 days trading horizon Sunzen Biotech is expected to generate 4.23 times less return on investment than Lysaght Galvanized. But when comparing it to its historical volatility, Sunzen Biotech Bhd is 2.56 times less risky than Lysaght Galvanized. It trades about 0.01 of its potential returns per unit of risk. Lysaght Galvanized Steel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Lysaght Galvanized Steel on October 26, 2024 and sell it today you would lose (5.00) from holding Lysaght Galvanized Steel or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Lysaght Galvanized Steel |
Sunzen Biotech and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Lysaght Galvanized
The main advantage of trading using opposite Sunzen Biotech and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech position performs unexpectedly, Lysaght Galvanized 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 Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized's long position.| Sunzen Biotech vs. Nestle Bhd | Sunzen Biotech vs. PPB Group Bhd | Sunzen Biotech vs. IOI Bhd | Sunzen Biotech vs. FGV Holdings Bhd |
| Lysaght Galvanized vs. CPE Technology Berhad | Lysaght Galvanized vs. Supercomnet Technologies Bhd | Lysaght Galvanized vs. Sunzen Biotech Bhd | Lysaght Galvanized vs. Carlsberg Brewery Malaysia |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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