Correlation Between SFP Tech and LPI Capital
Can any of the company-specific risk be diversified away by investing in both SFP Tech and LPI Capital 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 LPI Capital 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 LPI Capital Bhd, you can compare the effects of market volatilities on SFP Tech and LPI Capital 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 LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and LPI Capital.
Diversification Opportunities for SFP Tech and LPI Capital
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SFP and LPI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital 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 LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of SFP Tech i.e., SFP Tech and LPI Capital go up and down completely randomly.
Pair Corralation between SFP Tech and LPI Capital
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 4.11 times more return on investment than LPI Capital. However, SFP Tech is 4.11 times more volatile than LPI Capital Bhd. It trades about 0.02 of its potential returns per unit of risk. LPI Capital Bhd is currently generating about 0.05 per unit of risk. If you would invest 60.00 in SFP Tech Holdings on September 3, 2024 and sell it today you would earn a total of 7.00 from holding SFP Tech Holdings or generate 11.67% 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. LPI Capital Bhd
Performance |
| Timeline |
| SFP Tech Holdings |
| LPI Capital Bhd |
SFP Tech and LPI Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and LPI Capital
The main advantage of trading using opposite SFP Tech and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital'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 |
| LPI Capital vs. SFP Tech Holdings | LPI Capital vs. YX Precious Metals | LPI Capital vs. FARM FRESH BERHAD | LPI Capital vs. ES Ceramics Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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