Correlation Between Resintech Bhd and SSF Home

Can any of the company-specific risk be diversified away by investing in both Resintech Bhd and SSF Home 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 Resintech Bhd and SSF Home into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Resintech Bhd and SSF Home Group, you can compare the effects of market volatilities on Resintech Bhd and SSF Home 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 Resintech Bhd with a short position of SSF Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and SSF Home.

Diversification Opportunities for Resintech Bhd and SSF Home

-0.16

Correlation Coefficient

Resintech Bhd  SSF Home

Good diversification

The 3 months correlation between Resintech and SSF is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd and SSF Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSF Home Group and Resintech Bhd 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 Resintech Bhd are associated (or correlated) with SSF Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSF Home Group has no effect on the direction of Resintech Bhd i.e., Resintech Bhd and SSF Home go up and down completely randomly.

Pair Corralation between Resintech Bhd and SSF Home

Assuming the 90 days trading horizon Resintech Bhd is expected to generate 8.77 times less return on investment than SSF Home. But when comparing it to its historical volatility, Resintech Bhd is 1.23 times less risky than SSF Home. It trades about 0.02 of its potential returns per unit of risk. SSF Home Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  34.00  in SSF Home Group on December 2, 2024 and sell it today you would earn a total of  7.00  from holding SSF Home Group or generate 20.59% return on investment over 90 days.

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

Resintech Bhd  vs.  SSF Home Group

Resintech Bhd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Resintech Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Resintech Bhd is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

SSF Home Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSF Home Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, SSF Home disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Resintech Bhd and SSF Home

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

The idea behind Resintech Bhd and SSF Home Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.