Correlation Between SFP Tech and Sunzen Biotech
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Sunzen Biotech 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 Sunzen Biotech 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 Sunzen Biotech Bhd, you can compare the effects of market volatilities on SFP Tech and Sunzen Biotech 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 Sunzen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Sunzen Biotech.
Diversification Opportunities for SFP Tech and Sunzen Biotech
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SFP and Sunzen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Sunzen Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunzen Biotech 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 Sunzen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunzen Biotech Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and Sunzen Biotech go up and down completely randomly.
Pair Corralation between SFP Tech and Sunzen Biotech
Assuming the 90 days trading horizon SFP Tech Holdings is expected to under-perform the Sunzen Biotech. In addition to that, SFP Tech is 1.05 times more volatile than Sunzen Biotech Bhd. It trades about -0.01 of its total potential returns per unit of risk. Sunzen Biotech Bhd is currently generating about 0.05 per unit of volatility. If you would invest 21.00 in Sunzen Biotech Bhd on August 24, 2024 and sell it today you would earn a total of 11.00 from holding Sunzen Biotech Bhd or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Sunzen Biotech Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| Sunzen Biotech Bhd |
SFP Tech and Sunzen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Sunzen Biotech
The main advantage of trading using opposite SFP Tech and Sunzen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Sunzen Biotech 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 Sunzen Biotech will offset losses from the drop in Sunzen Biotech's long position.| SFP Tech vs. Malayan Banking Bhd | SFP Tech vs. Public Bank Bhd | SFP Tech vs. Petronas Chemicals Group | SFP Tech vs. Tenaga Nasional Bhd |
| Sunzen Biotech vs. JF Technology BHD | Sunzen Biotech vs. EA Technique M | Sunzen Biotech vs. Oriental Food Industries | Sunzen Biotech vs. Coraza Integrated Technology |
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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