Correlation Between Kobay Tech and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Kobay Tech 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 Kobay Tech and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kobay Tech Bhd and SFP Tech Holdings, you can compare the effects of market volatilities on Kobay Tech 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 Kobay Tech with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and SFP Tech.
Diversification Opportunities for Kobay Tech and SFP Tech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kobay and SFP is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech 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 Kobay 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 Kobay Tech 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 Kobay Tech i.e., Kobay Tech and SFP Tech go up and down completely randomly.
Pair Corralation between Kobay Tech and SFP Tech
Assuming the 90 days trading horizon Kobay Tech Bhd is expected to under-perform the SFP Tech. In addition to that, Kobay Tech is 1.46 times more volatile than SFP Tech Holdings. It trades about -0.22 of its total potential returns per unit of risk. SFP Tech Holdings is currently generating about -0.18 per unit of volatility. If you would invest 74.00 in SFP Tech Holdings on November 2, 2024 and sell it today you would lose (5.00) from holding SFP Tech Holdings or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kobay Tech Bhd vs. SFP Tech Holdings
Performance |
| Timeline |
| Kobay Tech Bhd |
| SFP Tech Holdings |
Kobay Tech and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and SFP Tech
The main advantage of trading using opposite Kobay Tech and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech 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.| Kobay Tech vs. Mycron Steel Bhd | Kobay Tech vs. Diversified Gateway Solutions | Kobay Tech vs. British American Tobacco | Kobay Tech vs. Shangri La Hotels |
| SFP Tech vs. Public Packages Holdings | SFP Tech vs. Kluang Rubber | SFP Tech vs. Kossan Rubber Industries | SFP Tech vs. Petronas Chemicals Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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