Correlation Between Choo Bee and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Choo Bee 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 Choo Bee and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and SFP Tech Holdings, you can compare the effects of market volatilities on Choo Bee 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 Choo Bee with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and SFP Tech.
Diversification Opportunities for Choo Bee and SFP Tech
Modest diversification
The 3 months correlation between Choo and SFP is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal 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 Choo Bee 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 Choo Bee Metal 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 Choo Bee i.e., Choo Bee and SFP Tech go up and down completely randomly.
Pair Corralation between Choo Bee and SFP Tech
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the SFP Tech. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 1.01 times less risky than SFP Tech. The stock trades about -0.07 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 61.00 in SFP Tech Holdings on August 24, 2024 and sell it today you would earn a total of 5.00 from holding SFP Tech Holdings or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Choo Bee Metal vs. SFP Tech Holdings
Performance |
| Timeline |
| Choo Bee Metal |
| SFP Tech Holdings |
Choo Bee and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and SFP Tech
The main advantage of trading using opposite Choo Bee and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee 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.| Choo Bee vs. Press Metal Bhd | Choo Bee vs. PMB Technology Bhd | Choo Bee vs. Pantech Group Holdings | Choo Bee vs. CSC Steel Holdings |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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