Correlation Between SFP Tech and MyTech Group
Can any of the company-specific risk be diversified away by investing in both SFP Tech and MyTech 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 MyTech 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 MyTech Group Bhd, you can compare the effects of market volatilities on SFP Tech and MyTech 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 MyTech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and MyTech Group.
Diversification Opportunities for SFP Tech and MyTech Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SFP and MyTech is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and MyTech Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyTech 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 MyTech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyTech Group Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and MyTech Group go up and down completely randomly.
Pair Corralation between SFP Tech and MyTech Group
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 1.85 times more return on investment than MyTech Group. However, SFP Tech is 1.85 times more volatile than MyTech Group Bhd. It trades about 0.18 of its potential returns per unit of risk. MyTech Group Bhd is currently generating about -0.38 per unit of risk. If you would invest 62.00 in SFP Tech Holdings on August 30, 2024 and sell it today you would earn a total of 6.00 from holding SFP Tech Holdings or generate 9.68% 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. MyTech Group Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| MyTech Group Bhd |
SFP Tech and MyTech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and MyTech Group
The main advantage of trading using opposite SFP Tech and MyTech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, MyTech 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 MyTech Group will offset losses from the drop in MyTech Group's long position.| SFP Tech vs. ONETECH SOLUTIONS HOLDINGS | SFP Tech vs. Uchi Technologies Bhd | SFP Tech vs. DC HEALTHCARE HOLDINGS | SFP Tech vs. Daya Materials 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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