Correlation Between Binasat Communications and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Binasat Communications 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 Binasat Communications and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and SFP Tech Holdings, you can compare the effects of market volatilities on Binasat Communications 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 Binasat Communications with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and SFP Tech.
Diversification Opportunities for Binasat Communications and SFP Tech
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and SFP is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications 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 Binasat Communications 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 Binasat Communications 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 Binasat Communications i.e., Binasat Communications and SFP Tech go up and down completely randomly.
Pair Corralation between Binasat Communications and SFP Tech
Assuming the 90 days trading horizon Binasat Communications is expected to generate 9.95 times less return on investment than SFP Tech. In addition to that, Binasat Communications is 1.31 times more volatile than SFP Tech Holdings. It trades about 0.02 of its total potential returns per unit of risk. SFP Tech Holdings is currently generating about 0.21 per unit of volatility. If you would invest 61.00 in SFP Tech Holdings on August 28, 2024 and sell it today you would earn a total of 7.00 from holding SFP Tech Holdings or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Binasat Communications Bhd vs. SFP Tech Holdings
Performance |
| Timeline |
| Binasat Communications |
| SFP Tech Holdings |
Binasat Communications and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and SFP Tech
The main advantage of trading using opposite Binasat Communications and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications 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.| Binasat Communications vs. Digistar Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. OpenSys M Bhd | Binasat Communications vs. Insas Bhd |
| SFP Tech vs. MClean Technologies Bhd | SFP Tech vs. PMB Technology Bhd | SFP Tech vs. Awanbiru Technology Bhd | SFP Tech vs. Sungei Bagan Rubber |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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