Correlation Between SFP Tech and Kawan Food
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Kawan Food 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 Kawan Food 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 Kawan Food Bhd, you can compare the effects of market volatilities on SFP Tech and Kawan Food 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 Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Kawan Food.
Diversification Opportunities for SFP Tech and Kawan Food
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SFP and Kawan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food 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 Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and Kawan Food go up and down completely randomly.
Pair Corralation between SFP Tech and Kawan Food
Assuming the 90 days trading horizon SFP Tech Holdings is expected to under-perform the Kawan Food. In addition to that, SFP Tech is 3.72 times more volatile than Kawan Food Bhd. It trades about -0.79 of its total potential returns per unit of risk. Kawan Food Bhd is currently generating about -0.11 per unit of volatility. If you would invest 158.00 in Kawan Food Bhd on December 4, 2024 and sell it today you would lose (5.00) from holding Kawan Food Bhd or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Kawan Food Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| Kawan Food Bhd |
SFP Tech and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Kawan Food
The main advantage of trading using opposite SFP Tech and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food'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 |
| Kawan Food vs. PIE Industrial Bhd | Kawan Food vs. Sapura Industrial Bhd | Kawan Food vs. Malayan Banking Bhd | Kawan Food vs. YX Precious Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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