Correlation Between PIE Industrial and SFP Tech
Can any of the company-specific risk be diversified away by investing in both PIE Industrial 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 PIE Industrial and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIE Industrial Bhd and SFP Tech Holdings, you can compare the effects of market volatilities on PIE Industrial 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 PIE Industrial with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and SFP Tech.
Diversification Opportunities for PIE Industrial and SFP Tech
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PIE and SFP is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial 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 PIE Industrial 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 PIE Industrial 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 PIE Industrial i.e., PIE Industrial and SFP Tech go up and down completely randomly.
Pair Corralation between PIE Industrial and SFP Tech
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to generate 1.01 times more return on investment than SFP Tech. However, PIE Industrial is 1.01 times more volatile than SFP Tech Holdings. It trades about 0.36 of its potential returns per unit of risk. SFP Tech Holdings is currently generating about 0.16 per unit of risk. If you would invest 542.00 in PIE Industrial Bhd on September 12, 2024 and sell it today you would earn a total of 83.00 from holding PIE Industrial Bhd or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIE Industrial Bhd vs. SFP Tech Holdings
Performance |
| Timeline |
| PIE Industrial Bhd |
| SFP Tech Holdings |
PIE Industrial and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIE Industrial and SFP Tech
The main advantage of trading using opposite PIE Industrial and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial 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.| PIE Industrial vs. Kobay Tech Bhd | PIE Industrial vs. JF Technology BHD | PIE Industrial vs. CB Industrial Product | PIE Industrial vs. MyTech Group Bhd |
| 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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