Correlation Between MQ Technology and CB Industrial
Can any of the company-specific risk be diversified away by investing in both MQ Technology and CB Industrial 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 MQ Technology and CB Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MQ Technology Bhd and CB Industrial Product, you can compare the effects of market volatilities on MQ Technology and CB Industrial 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 MQ Technology with a short position of CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MQ Technology and CB Industrial.
Diversification Opportunities for MQ Technology and CB Industrial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 0070 and 7076 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MQ Technology Bhd and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product and MQ Technology 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 MQ Technology Bhd are associated (or correlated) with CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of MQ Technology i.e., MQ Technology and CB Industrial go up and down completely randomly.
Pair Corralation between MQ Technology and CB Industrial
Assuming the 90 days trading horizon MQ Technology Bhd is expected to generate 4.27 times more return on investment than CB Industrial. However, MQ Technology is 4.27 times more volatile than CB Industrial Product. It trades about 0.12 of its potential returns per unit of risk. CB Industrial Product is currently generating about -0.2 per unit of risk. If you would invest 9.00 in MQ Technology Bhd on October 23, 2024 and sell it today you would earn a total of 1.00 from holding MQ Technology Bhd or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
MQ Technology Bhd vs. CB Industrial Product
Performance |
| Timeline |
| MQ Technology Bhd |
| CB Industrial Product |
MQ Technology and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MQ Technology and CB Industrial
The main advantage of trading using opposite MQ Technology and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MQ Technology position performs unexpectedly, CB Industrial 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| MQ Technology vs. Lotte Chemical Titan | MQ Technology vs. MClean Technologies Bhd | MQ Technology vs. IHH Healthcare Bhd | MQ Technology vs. DC HEALTHCARE HOLDINGS |
| CB Industrial vs. Star Media Group | CB Industrial vs. Silver Ridge Holdings | CB Industrial vs. Systech Bhd | CB Industrial vs. Cloudpoint Technology Berhad |
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 CEOs Directory module to screen CEOs from public companies around the world.
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