Correlation Between SFP Tech and Leader Steel
Can any of the company-specific risk be diversified away by investing in both SFP Tech and Leader Steel 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 Leader Steel 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 Leader Steel Holdings, you can compare the effects of market volatilities on SFP Tech and Leader Steel 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 Leader Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Leader Steel.
Diversification Opportunities for SFP Tech and Leader Steel
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SFP and Leader is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Leader Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Steel Holdings 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 Leader Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Steel Holdings has no effect on the direction of SFP Tech i.e., SFP Tech and Leader Steel go up and down completely randomly.
Pair Corralation between SFP Tech and Leader Steel
Assuming the 90 days trading horizon SFP Tech Holdings is expected to generate 0.91 times more return on investment than Leader Steel. However, SFP Tech Holdings is 1.1 times less risky than Leader Steel. It trades about 0.03 of its potential returns per unit of risk. Leader Steel Holdings is currently generating about -0.05 per unit of risk. If you would invest 66.00 in SFP Tech Holdings on November 2, 2024 and sell it today you would earn a total of 3.00 from holding SFP Tech Holdings or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFP Tech Holdings vs. Leader Steel Holdings
Performance |
| Timeline |
| SFP Tech Holdings |
| Leader Steel Holdings |
SFP Tech and Leader Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFP Tech and Leader Steel
The main advantage of trading using opposite SFP Tech and Leader Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Leader Steel 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 Leader Steel will offset losses from the drop in Leader Steel's long position.| SFP Tech vs. Public Packages Holdings | SFP Tech vs. Kluang Rubber | SFP Tech vs. Kossan Rubber Industries | SFP Tech vs. Petronas Chemicals Group |
| Leader Steel vs. Kossan Rubber Industries | Leader Steel vs. Sungei Bagan Rubber | Leader Steel vs. Awanbiru Technology Bhd | Leader Steel vs. BP Plastics Holding |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |