Correlation Between Oriental Food and Sunzen Biotech
Can any of the company-specific risk be diversified away by investing in both Oriental Food and Sunzen Biotech 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 Oriental Food and Sunzen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Food Industries and Sunzen Biotech Bhd, you can compare the effects of market volatilities on Oriental Food and Sunzen Biotech 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 Oriental Food with a short position of Sunzen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Food and Sunzen Biotech.
Diversification Opportunities for Oriental Food and Sunzen Biotech
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oriental and Sunzen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Food Industries and Sunzen Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunzen Biotech Bhd and Oriental Food 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 Oriental Food Industries are associated (or correlated) with Sunzen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunzen Biotech Bhd has no effect on the direction of Oriental Food i.e., Oriental Food and Sunzen Biotech go up and down completely randomly.
Pair Corralation between Oriental Food and Sunzen Biotech
Assuming the 90 days trading horizon Oriental Food Industries is expected to under-perform the Sunzen Biotech. In addition to that, Oriental Food is 2.81 times more volatile than Sunzen Biotech Bhd. It trades about -0.09 of its total potential returns per unit of risk. Sunzen Biotech Bhd is currently generating about -0.21 per unit of volatility. If you would invest 33.00 in Sunzen Biotech Bhd on August 24, 2024 and sell it today you would lose (1.00) from holding Sunzen Biotech Bhd or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Food Industries vs. Sunzen Biotech Bhd
Performance |
| Timeline |
| Oriental Food Industries |
| Sunzen Biotech Bhd |
Oriental Food and Sunzen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Food and Sunzen Biotech
The main advantage of trading using opposite Oriental Food and Sunzen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Food position performs unexpectedly, Sunzen Biotech 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 Sunzen Biotech will offset losses from the drop in Sunzen Biotech's long position.| Oriental Food vs. Nestle Bhd | Oriental Food vs. FGV Holdings Bhd | Oriental Food vs. FARM FRESH BERHAD | Oriental Food vs. Kawan Food Bhd |
| Sunzen Biotech vs. JF Technology BHD | Sunzen Biotech vs. EA Technique M | Sunzen Biotech vs. Oriental Food Industries | Sunzen Biotech vs. Coraza Integrated Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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