Correlation Between SFP Tech and JAKS Resources
Can any of the company-specific risk be diversified away by investing in both SFP Tech and JAKS Resources 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 JAKS Resources 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 JAKS Resources Bhd, you can compare the effects of market volatilities on SFP Tech and JAKS Resources 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 JAKS Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and JAKS Resources.
Diversification Opportunities for SFP Tech and JAKS Resources
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SFP and JAKS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and JAKS Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKS Resources 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 JAKS Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKS Resources Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and JAKS Resources go up and down completely randomly.
Pair Corralation between SFP Tech and JAKS Resources
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 0.53 times more return on investment than JAKS Resources. However, SFP Tech Holdings is 1.89 times less risky than JAKS Resources. It trades about -0.03 of its potential returns per unit of risk. JAKS Resources Bhd is currently generating about -0.08 per unit of risk. If you would invest 72.00 in SFP Tech Holdings on October 24, 2024 and sell it today you would lose (1.00) from holding SFP Tech Holdings or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. JAKS Resources Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| JAKS Resources Bhd |
SFP Tech and JAKS Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and JAKS Resources
The main advantage of trading using opposite SFP Tech and JAKS Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, JAKS Resources 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 JAKS Resources will offset losses from the drop in JAKS Resources' long position.| SFP Tech vs. Senheng New Retail | SFP Tech vs. KPJ Healthcare Bhd | SFP Tech vs. CSC Steel Holdings | SFP Tech vs. Impiana Hotels Bhd |
| JAKS Resources vs. Nova Wellness Group | JAKS Resources vs. Steel Hawk Berhad | JAKS Resources vs. DC HEALTHCARE HOLDINGS | JAKS Resources vs. Sports Toto Berhad |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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