Correlation Between SFP Tech and Eonmetall Group
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Eonmetall 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 Eonmetall 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 Eonmetall Group Bhd, you can compare the effects of market volatilities on SFP Tech and Eonmetall 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 Eonmetall Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Eonmetall Group.
Diversification Opportunities for SFP Tech and Eonmetall Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SFP and Eonmetall is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Eonmetall Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eonmetall Group 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 Eonmetall Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eonmetall Group Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and Eonmetall Group go up and down completely randomly.
Pair Corralation between SFP Tech and Eonmetall Group
If you would invest 0.00 in Eonmetall Group Bhd on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Eonmetall Group Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Eonmetall Group Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eonmetall Group Bhd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SFP Tech and Eonmetall Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Eonmetall Group
The main advantage of trading using opposite SFP Tech and Eonmetall Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Eonmetall 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 Eonmetall Group will offset losses from the drop in Eonmetall Group's long position.The idea behind SFP Tech Holdings and Eonmetall Group Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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