Correlation Between Scientex Packaging and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Scientex Packaging 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 Scientex Packaging and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientex Packaging and SFP Tech Holdings, you can compare the effects of market volatilities on Scientex Packaging 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 Scientex Packaging with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientex Packaging and SFP Tech.
Diversification Opportunities for Scientex Packaging and SFP Tech
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scientex and SFP is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Scientex Packaging 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 Scientex Packaging 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 Scientex Packaging 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 Scientex Packaging i.e., Scientex Packaging and SFP Tech go up and down completely randomly.
Pair Corralation between Scientex Packaging and SFP Tech
Assuming the 90 days trading horizon Scientex Packaging is expected to generate 0.25 times more return on investment than SFP Tech. However, Scientex Packaging is 4.03 times less risky than SFP Tech. It trades about -0.23 of its potential returns per unit of risk. SFP Tech Holdings is currently generating about -0.75 per unit of risk. If you would invest 180.00 in Scientex Packaging on November 29, 2024 and sell it today you would lose (10.00) from holding Scientex Packaging or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scientex Packaging vs. SFP Tech Holdings
Performance |
| Timeline |
| Scientex Packaging |
| SFP Tech Holdings |
Scientex Packaging and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientex Packaging and SFP Tech
The main advantage of trading using opposite Scientex Packaging and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientex Packaging 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.| Scientex Packaging vs. Malaysia Steel Works | Scientex Packaging vs. Petronas Chemicals Group | Scientex Packaging vs. Binasat Communications Bhd | Scientex Packaging vs. IHH Healthcare Bhd |
| SFP Tech vs. Awanbiru Technology Bhd | SFP Tech vs. Radiant Globaltech Bhd | SFP Tech vs. BP Plastics Holding | SFP Tech vs. Al Aqar Healthcare |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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