Correlation Between Resintech Bhd and Sunzen Biotech
Can any of the company-specific risk be diversified away by investing in both Resintech Bhd 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 Resintech Bhd and Sunzen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resintech Bhd and Sunzen Biotech Bhd, you can compare the effects of market volatilities on Resintech Bhd 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 Resintech Bhd with a short position of Sunzen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and Sunzen Biotech.
Diversification Opportunities for Resintech Bhd and Sunzen Biotech
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Resintech and Sunzen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd i.e., Resintech Bhd and Sunzen Biotech go up and down completely randomly.
Pair Corralation between Resintech Bhd and Sunzen Biotech
Assuming the 90 days trading horizon Resintech Bhd is expected to generate 1.46 times more return on investment than Sunzen Biotech. However, Resintech Bhd is 1.46 times more volatile than Sunzen Biotech Bhd. It trades about 0.1 of its potential returns per unit of risk. Sunzen Biotech Bhd is currently generating about -0.03 per unit of risk. If you would invest 59.00 in Resintech Bhd on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Resintech Bhd or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resintech Bhd vs. Sunzen Biotech Bhd
Performance |
| Timeline |
| Resintech Bhd |
| Sunzen Biotech Bhd |
Resintech Bhd and Sunzen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resintech Bhd and Sunzen Biotech
The main advantage of trading using opposite Resintech Bhd and Sunzen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resintech Bhd 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.| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. OpenSys M Bhd | Resintech Bhd vs. Insas Bhd |
| Sunzen Biotech vs. Apollo Food Holdings | Sunzen Biotech vs. YX Precious Metals | Sunzen Biotech vs. Melewar Industrial Group | Sunzen Biotech vs. YTL Hospitality REIT |
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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