Correlation Between Tex Cycle and CPE Technology
Can any of the company-specific risk be diversified away by investing in both Tex Cycle and CPE Technology 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 Tex Cycle and CPE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tex Cycle Technology and CPE Technology Berhad, you can compare the effects of market volatilities on Tex Cycle and CPE Technology 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 Tex Cycle with a short position of CPE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and CPE Technology.
Diversification Opportunities for Tex Cycle and CPE Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tex and CPE is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology and CPE Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPE Technology Berhad and Tex Cycle 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 Tex Cycle Technology are associated (or correlated) with CPE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPE Technology Berhad has no effect on the direction of Tex Cycle i.e., Tex Cycle and CPE Technology go up and down completely randomly.
Pair Corralation between Tex Cycle and CPE Technology
Assuming the 90 days trading horizon Tex Cycle Technology is expected to under-perform the CPE Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tex Cycle Technology is 1.81 times less risky than CPE Technology. The stock trades about -0.12 of its potential returns per unit of risk. The CPE Technology Berhad is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 104.00 in CPE Technology Berhad on November 2, 2024 and sell it today you would lose (7.00) from holding CPE Technology Berhad or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Cycle Technology vs. CPE Technology Berhad
Performance |
| Timeline |
| Tex Cycle Technology |
| CPE Technology Berhad |
Tex Cycle and CPE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and CPE Technology
The main advantage of trading using opposite Tex Cycle and CPE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle position performs unexpectedly, CPE Technology 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 CPE Technology will offset losses from the drop in CPE Technology's long position.| Tex Cycle vs. PIE Industrial Bhd | Tex Cycle vs. Radiant Globaltech Bhd | Tex Cycle vs. YX Precious Metals | Tex Cycle vs. MI Technovation Bhd |
| CPE Technology vs. KPJ Healthcare Bhd | CPE Technology vs. Sapura Industrial Bhd | CPE Technology vs. Diversified Gateway Solutions | CPE Technology vs. Carlsberg Brewery Malaysia |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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