Correlation Between Sunway Construction and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Sunway Construction 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 Sunway Construction and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunway Construction Group and SFP Tech Holdings, you can compare the effects of market volatilities on Sunway Construction 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 Sunway Construction with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunway Construction and SFP Tech.
Diversification Opportunities for Sunway Construction and SFP Tech
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunway and SFP is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sunway Construction Group 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 Sunway Construction 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 Sunway Construction Group 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 Sunway Construction i.e., Sunway Construction and SFP Tech go up and down completely randomly.
Pair Corralation between Sunway Construction and SFP Tech
Assuming the 90 days trading horizon Sunway Construction Group is expected to under-perform the SFP Tech. In addition to that, Sunway Construction is 1.97 times more volatile than SFP Tech Holdings. It trades about -0.26 of its total potential returns per unit of risk. SFP Tech Holdings is currently generating about -0.03 per unit of volatility. If you would invest 70.00 in SFP Tech Holdings on October 20, 2024 and sell it today you would lose (1.00) from holding SFP Tech Holdings or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunway Construction Group vs. SFP Tech Holdings
Performance |
| Timeline |
| Sunway Construction |
| SFP Tech Holdings |
Sunway Construction and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunway Construction and SFP Tech
The main advantage of trading using opposite Sunway Construction and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunway Construction 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.| Sunway Construction vs. ES Ceramics Technology | Sunway Construction vs. Sports Toto Berhad | Sunway Construction vs. Shangri La Hotels | Sunway Construction vs. Cosmos Technology International |
| SFP Tech vs. Malayan Banking Bhd | SFP Tech vs. Public Bank Bhd | SFP Tech vs. Petronas Chemicals Group | SFP Tech vs. Tenaga Nasional 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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