Correlation Between SFP Tech and Pesona Metro

Can any of the company-specific risk be diversified away by investing in both SFP Tech and Pesona Metro 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 SFP Tech and Pesona Metro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SFP Tech Holdings and Pesona Metro Holdings, you can compare the effects of market volatilities on SFP Tech and Pesona Metro 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 SFP Tech with a short position of Pesona Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFP Tech and Pesona Metro.

Diversification Opportunities for SFP Tech and Pesona Metro

0.62

Correlation Coefficient

SFP Tech  Pesona Metro

Poor diversification

The 3 months correlation between SFP and Pesona is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SFP Tech Holdings and Pesona Metro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pesona Metro Holdings and SFP Tech 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 SFP Tech Holdings are associated (or correlated) with Pesona Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pesona Metro Holdings has no effect on the direction of SFP Tech i.e., SFP Tech and Pesona Metro go up and down completely randomly.

Pair Corralation between SFP Tech and Pesona Metro

Assuming the 90 days trading horizon SFP Tech Holdings is expected to under-perform the Pesona Metro. In addition to that, SFP Tech is 1.4 times more volatile than Pesona Metro Holdings. It trades about -0.33 of its total potential returns per unit of risk. Pesona Metro Holdings is currently generating about -0.07 per unit of volatility. If you would invest  32.00  in Pesona Metro Holdings on December 24, 2024 and sell it today you would lose (5.00) from holding Pesona Metro Holdings or give up 15.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SFP Tech Holdings  vs.  Pesona Metro Holdings

SFP Tech Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days SFP Tech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pesona Metro Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pesona Metro Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with SFP Tech and Pesona Metro

The main advantage of trading using opposite SFP Tech and Pesona Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFP Tech position performs unexpectedly, Pesona Metro 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 Pesona Metro will offset losses from the drop in Pesona Metro's long position.

The idea behind SFP Tech Holdings and Pesona Metro Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.