Correlation Between KPJ Healthcare and SFP Tech
Can any of the company-specific risk be diversified away by investing in both KPJ Healthcare 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 KPJ Healthcare and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPJ Healthcare Bhd and SFP Tech Holdings, you can compare the effects of market volatilities on KPJ Healthcare 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 KPJ Healthcare with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPJ Healthcare and SFP Tech.
Diversification Opportunities for KPJ Healthcare and SFP Tech
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KPJ and SFP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding KPJ Healthcare 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 KPJ Healthcare 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 KPJ Healthcare 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 KPJ Healthcare i.e., KPJ Healthcare and SFP Tech go up and down completely randomly.
Pair Corralation between KPJ Healthcare and SFP Tech
Assuming the 90 days trading horizon KPJ Healthcare Bhd is expected to generate 0.69 times more return on investment than SFP Tech. However, KPJ Healthcare Bhd is 1.44 times less risky than SFP Tech. It trades about -0.14 of its potential returns per unit of risk. SFP Tech Holdings is currently generating about -0.21 per unit of risk. If you would invest 235.00 in KPJ Healthcare Bhd on November 3, 2024 and sell it today you would lose (9.00) from holding KPJ Healthcare Bhd or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPJ Healthcare Bhd vs. SFP Tech Holdings
Performance |
| Timeline |
| KPJ Healthcare Bhd |
| SFP Tech Holdings |
KPJ Healthcare and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPJ Healthcare and SFP Tech
The main advantage of trading using opposite KPJ Healthcare and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPJ Healthcare 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.| KPJ Healthcare vs. FARM FRESH BERHAD | KPJ Healthcare vs. Media Prima Bhd | KPJ Healthcare vs. Apollo Food Holdings | KPJ Healthcare vs. Berjaya Food Bhd |
| SFP Tech vs. Diversified Gateway Solutions | SFP Tech vs. Dataprep Holdings Bhd | SFP Tech vs. Senheng New Retail | SFP Tech vs. Bank Islam Malaysia |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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