Correlation Between Eco World and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Eco World 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 Eco World and SFP Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eco World Develop and SFP Tech Holdings, you can compare the effects of market volatilities on Eco World 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 Eco World with a short position of SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco World and SFP Tech.
Diversification Opportunities for Eco World and SFP Tech
Significant diversification
The 3 months correlation between Eco and SFP is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eco World Develop 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 Eco World 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 Eco World Develop 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 Eco World i.e., Eco World and SFP Tech go up and down completely randomly.
Pair Corralation between Eco World and SFP Tech
Assuming the 90 days trading horizon Eco World is expected to generate 2.3 times less return on investment than SFP Tech. But when comparing it to its historical volatility, Eco World Develop is 1.25 times less risky than SFP Tech. It trades about 0.12 of its potential returns per unit of risk. SFP Tech Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 60.00 in SFP Tech Holdings on September 1, 2024 and sell it today you would earn a total of 7.00 from holding SFP Tech Holdings or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eco World Develop vs. SFP Tech Holdings
Performance |
| Timeline |
| Eco World Develop |
| SFP Tech Holdings |
Eco World and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eco World and SFP Tech
The main advantage of trading using opposite Eco World and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco World 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.| Eco World vs. SFP Tech Holdings | Eco World vs. Aurelius Technologies Bhd | Eco World vs. Cosmos Technology International | Eco World vs. Eonmetall Group Bhd |
| SFP Tech vs. Lotte Chemical Titan | SFP Tech vs. Sports Toto Berhad | SFP Tech vs. Media Prima Bhd | SFP Tech vs. YX Precious Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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