Correlation Between Fraser Neave and Sunzen Biotech

Can any of the company-specific risk be diversified away by investing in both Fraser Neave 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 Fraser Neave and Sunzen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fraser Neave Holdings and Sunzen Biotech Bhd, you can compare the effects of market volatilities on Fraser Neave 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 Fraser Neave with a short position of Sunzen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fraser Neave and Sunzen Biotech.

Diversification Opportunities for Fraser Neave and Sunzen Biotech

0.26

Correlation Coefficient

Fraser Neave  Sunzen Biotech

Modest diversification

The 3 months correlation between Fraser and Sunzen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fraser Neave Holdings 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 Fraser Neave 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 Fraser Neave Holdings 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 Fraser Neave i.e., Fraser Neave and Sunzen Biotech go up and down completely randomly.

Pair Corralation between Fraser Neave and Sunzen Biotech

Assuming the 90 days trading horizon Fraser Neave is expected to generate 22.88 times less return on investment than Sunzen Biotech. But when comparing it to its historical volatility, Fraser Neave Holdings is 2.27 times less risky than Sunzen Biotech. It trades about 0.0 of its potential returns per unit of risk. Sunzen Biotech Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Sunzen Biotech Bhd on December 2, 2024 and sell it today you would earn a total of  11.00  from holding Sunzen Biotech Bhd or generate 55.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Fraser Neave Holdings  vs.  Sunzen Biotech Bhd

Fraser Neave Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fraser Neave Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Sunzen Biotech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunzen Biotech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sunzen Biotech is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Fraser Neave and Sunzen Biotech

The main advantage of trading using opposite Fraser Neave and Sunzen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fraser Neave 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.

The idea behind Fraser Neave Holdings and Sunzen Biotech Bhd 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.