Correlation Between SFP Tech and PESTECH International
Can any of the company-specific risk be diversified away by investing in both SFP Tech and PESTECH International 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 PESTECH International 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 PESTECH International Bhd, you can compare the effects of market volatilities on SFP Tech and PESTECH International 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 PESTECH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and PESTECH International.
Diversification Opportunities for SFP Tech and PESTECH International
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between SFP and PESTECH is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and PESTECH International Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PESTECH International 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 PESTECH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PESTECH International Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and PESTECH International go up and down completely randomly.
Pair Corralation between SFP Tech and PESTECH International
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 0.55 times more return on investment than PESTECH International. However, SFP Tech Holdings is 1.81 times less risky than PESTECH International. It trades about 0.05 of its potential returns per unit of risk. PESTECH International Bhd is currently generating about 0.02 per unit of risk. If you would invest 64.00 in SFP Tech Holdings on September 12, 2024 and sell it today you would earn a total of 4.00 from holding SFP Tech Holdings or generate 6.25% 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. PESTECH International Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| PESTECH International Bhd |
SFP Tech and PESTECH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and PESTECH International
The main advantage of trading using opposite SFP Tech and PESTECH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, PESTECH International 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 PESTECH International will offset losses from the drop in PESTECH International's long position.| SFP Tech vs. Awanbiru Technology Bhd | SFP Tech vs. FARM FRESH BERHAD | SFP Tech vs. Globetronics Tech Bhd | SFP Tech vs. Uchi Technologies Bhd |
| PESTECH International vs. Uchi Technologies Bhd | PESTECH International vs. FARM FRESH BERHAD | PESTECH International vs. Public Bank Bhd | PESTECH International vs. Dufu Tech Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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