Correlation Between SFP Tech and Media Prima
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Media Prima 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 Media Prima 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 Media Prima Bhd, you can compare the effects of market volatilities on SFP Tech and Media Prima 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 Media Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Media Prima.
Diversification Opportunities for SFP Tech and Media Prima
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SFP and Media is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Media Prima Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Prima 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 Media Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Prima Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and Media Prima go up and down completely randomly.
Pair Corralation between SFP Tech and Media Prima
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 1.51 times more return on investment than Media Prima. However, SFP Tech is 1.51 times more volatile than Media Prima Bhd. It trades about 0.03 of its potential returns per unit of risk. Media Prima Bhd is currently generating about 0.02 per unit of risk. If you would invest 66.00 in SFP Tech Holdings on November 2, 2024 and sell it today you would earn a total of 3.00 from holding SFP Tech Holdings or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Media Prima Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| Media Prima Bhd |
SFP Tech and Media Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Media Prima
The main advantage of trading using opposite SFP Tech and Media Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Media Prima 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 Media Prima will offset losses from the drop in Media Prima's long position.| SFP Tech vs. Public Packages Holdings | SFP Tech vs. Kluang Rubber | SFP Tech vs. Kossan Rubber Industries | SFP Tech vs. Petronas Chemicals Group |
| Media Prima vs. ES Ceramics Technology | Media Prima vs. Binasat Communications Bhd | Media Prima vs. Public Bank Bhd | Media Prima vs. Sunway Construction Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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