Correlation Between Supercomnet Technologies and Sunzen Biotech
Can any of the company-specific risk be diversified away by investing in both Supercomnet Technologies 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 Supercomnet Technologies and Sunzen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercomnet Technologies Bhd and Sunzen Biotech Bhd, you can compare the effects of market volatilities on Supercomnet Technologies 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 Supercomnet Technologies with a short position of Sunzen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercomnet Technologies and Sunzen Biotech.
Diversification Opportunities for Supercomnet Technologies and Sunzen Biotech
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supercomnet and Sunzen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Supercomnet Technologies 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 Supercomnet Technologies 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 Supercomnet Technologies 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 Supercomnet Technologies i.e., Supercomnet Technologies and Sunzen Biotech go up and down completely randomly.
Pair Corralation between Supercomnet Technologies and Sunzen Biotech
Assuming the 90 days trading horizon Supercomnet Technologies Bhd is expected to generate 1.25 times more return on investment than Sunzen Biotech. However, Supercomnet Technologies is 1.25 times more volatile than Sunzen Biotech Bhd. It trades about 0.04 of its potential returns per unit of risk. Sunzen Biotech Bhd is currently generating about 0.01 per unit of risk. If you would invest 133.00 in Supercomnet Technologies Bhd on September 15, 2024 and sell it today you would earn a total of 5.00 from holding Supercomnet Technologies Bhd or generate 3.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Supercomnet Technologies Bhd vs. Sunzen Biotech Bhd
Performance |
Timeline |
Supercomnet Technologies |
Sunzen Biotech Bhd |
Supercomnet Technologies and Sunzen Biotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Supercomnet Technologies and Sunzen Biotech
The main advantage of trading using opposite Supercomnet Technologies and Sunzen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercomnet Technologies 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.Supercomnet Technologies vs. Computer Forms Bhd | Supercomnet Technologies vs. RHB Bank Bhd | Supercomnet Technologies vs. Aeon Credit Service | Supercomnet Technologies vs. Alliance Financial Group |
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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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