Correlation Between FGV Holdings and SFP Tech
Can any of the company-specific risk be diversified away by investing in both FGV Holdings and SFP Tech 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 FGV Holdings and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGV Holdings Bhd and SFP Tech Holdings, you can compare the effects of market volatilities on FGV Holdings and SFP Tech 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 FGV Holdings with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGV Holdings and SFP Tech.
Diversification Opportunities for FGV Holdings and SFP Tech
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FGV and SFP is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FGV Holdings Bhd and SFP Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFP Tech Holdings and FGV Holdings 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 FGV Holdings Bhd are associated (or correlated) with SFP Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFP Tech Holdings has no effect on the direction of FGV Holdings i.e., FGV Holdings and SFP Tech go up and down completely randomly.
Pair Corralation between FGV Holdings and SFP Tech
Assuming the 90 days trading horizon FGV Holdings Bhd is expected to under-perform the SFP Tech. But the stock apears to be less risky and, when comparing its historical volatility, FGV Holdings Bhd is 1.42 times less risky than SFP Tech. The stock trades about -0.29 of its potential returns per unit of risk. The SFP Tech Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 64.00 in SFP Tech Holdings on September 13, 2024 and sell it today you would earn a total of 4.00 from holding SFP Tech Holdings or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FGV Holdings Bhd vs. SFP Tech Holdings
Performance |
| Timeline |
| FGV Holdings Bhd |
| SFP Tech Holdings |
FGV Holdings and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FGV Holdings and SFP Tech
The main advantage of trading using opposite FGV Holdings and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGV Holdings position performs unexpectedly, SFP Tech 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 SFP Tech will offset losses from the drop in SFP Tech's long position.| FGV Holdings vs. SFP Tech Holdings | FGV Holdings vs. Magni Tech Industries | FGV Holdings vs. Shangri La Hotels | FGV Holdings vs. Icon Offshore Bhd |
| SFP Tech vs. Awanbiru Technology Bhd | SFP Tech vs. FARM FRESH BERHAD | SFP Tech vs. Globetronics Tech Bhd | SFP Tech vs. Uchi Technologies 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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