Correlation Between SFP Tech and Pantech Group
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Pantech Group 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 Pantech Group 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 Pantech Group Holdings, you can compare the effects of market volatilities on SFP Tech and Pantech Group 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 Pantech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Pantech Group.
Diversification Opportunities for SFP Tech and Pantech Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SFP and Pantech is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Pantech Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pantech Group Holdings 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 Pantech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pantech Group Holdings has no effect on the direction of SFP Tech i.e., SFP Tech and Pantech Group go up and down completely randomly.
Pair Corralation between SFP Tech and Pantech Group
Assuming the 90 days trading horizon SFP Tech is expected to generate 1.61 times less return on investment than Pantech Group. In addition to that, SFP Tech is 1.68 times more volatile than Pantech Group Holdings. It trades about 0.02 of its total potential returns per unit of risk. Pantech Group Holdings is currently generating about 0.06 per unit of volatility. If you would invest 66.00 in Pantech Group Holdings on September 4, 2024 and sell it today you would earn a total of 31.00 from holding Pantech Group Holdings or generate 46.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Pantech Group Holdings
Performance |
| Timeline |
| SFP Tech Holdings |
| Pantech Group Holdings |
SFP Tech and Pantech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Pantech Group
The main advantage of trading using opposite SFP Tech and Pantech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Pantech Group 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 Pantech Group will offset losses from the drop in Pantech Group's long position.| SFP Tech vs. Tex Cycle Technology | SFP Tech vs. Computer Forms Bhd | SFP Tech vs. Melewar Industrial Group | SFP Tech vs. PIE Industrial Bhd |
| Pantech Group vs. YX Precious Metals | Pantech Group vs. MyTech Group Bhd | Pantech Group vs. Magni Tech Industries | Pantech Group vs. Minetech Resources 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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