Correlation Between SFP Tech and Choo Bee
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Choo Bee 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 Choo Bee 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 Choo Bee Metal, you can compare the effects of market volatilities on SFP Tech and Choo Bee 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 Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Choo Bee.
Diversification Opportunities for SFP Tech and Choo Bee
Modest diversification
The 3 months correlation between SFP and Choo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal 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 Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of SFP Tech i.e., SFP Tech and Choo Bee go up and down completely randomly.
Pair Corralation between SFP Tech and Choo Bee
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 1.07 times more return on investment than Choo Bee. However, SFP Tech is 1.07 times more volatile than Choo Bee Metal. It trades about 0.06 of its potential returns per unit of risk. Choo Bee Metal is currently generating about -0.06 per unit of risk. If you would invest 64.00 in SFP Tech Holdings on August 28, 2024 and sell it today you would earn a total of 5.00 from holding SFP Tech Holdings or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Choo Bee Metal
Performance |
| Timeline |
| SFP Tech Holdings |
| Choo Bee Metal |
SFP Tech and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Choo Bee
The main advantage of trading using opposite SFP Tech and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee'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 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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