Correlation Between SFP Tech and Genetec Technology
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Genetec Technology 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 SFP Tech and Genetec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFP Tech Holdings and Genetec Technology Bhd, you can compare the effects of market volatilities on SFP Tech and Genetec Technology 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 SFP Tech with a short position of Genetec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Genetec Technology.
Diversification Opportunities for SFP Tech and Genetec Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SFP and Genetec is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Genetec Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetec Technology Bhd and SFP Tech 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 SFP Tech Holdings are associated (or correlated) with Genetec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetec Technology Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and Genetec Technology go up and down completely randomly.
Pair Corralation between SFP Tech and Genetec Technology
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 0.59 times more return on investment than Genetec Technology. However, SFP Tech Holdings is 1.69 times less risky than Genetec Technology. It trades about -0.04 of its potential returns per unit of risk. Genetec Technology Bhd is currently generating about -0.03 per unit of risk. If you would invest 97.00 in SFP Tech Holdings on September 5, 2024 and sell it today you would lose (28.00) from holding SFP Tech Holdings or give up 28.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Genetec Technology Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| Genetec Technology Bhd |
SFP Tech and Genetec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Genetec Technology
The main advantage of trading using opposite SFP Tech and Genetec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Genetec Technology 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 Genetec Technology will offset losses from the drop in Genetec Technology's long position.| SFP Tech vs. Ho Hup Construction | SFP Tech vs. Computer Forms Bhd | SFP Tech vs. Carlsberg Brewery Malaysia | SFP Tech vs. Malaysia Steel Works |
| Genetec Technology vs. DC HEALTHCARE HOLDINGS | Genetec Technology vs. Press Metal Bhd | Genetec Technology vs. Mycron Steel Bhd | Genetec Technology vs. Southern Steel 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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