Correlation Between ES Ceramics and Cloudpoint Technology
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Cloudpoint 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 ES Ceramics and Cloudpoint Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Cloudpoint Technology Berhad, you can compare the effects of market volatilities on ES Ceramics and Cloudpoint 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 ES Ceramics with a short position of Cloudpoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Cloudpoint Technology.
Diversification Opportunities for ES Ceramics and Cloudpoint Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 0100 and Cloudpoint is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Cloudpoint Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudpoint Technology and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Cloudpoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudpoint Technology has no effect on the direction of ES Ceramics i.e., ES Ceramics and Cloudpoint Technology go up and down completely randomly.
Pair Corralation between ES Ceramics and Cloudpoint Technology
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Cloudpoint Technology. In addition to that, ES Ceramics is 2.28 times more volatile than Cloudpoint Technology Berhad. It trades about -0.14 of its total potential returns per unit of risk. Cloudpoint Technology Berhad is currently generating about -0.26 per unit of volatility. If you would invest 94.00 in Cloudpoint Technology Berhad on November 29, 2024 and sell it today you would lose (10.00) from holding Cloudpoint Technology Berhad or give up 10.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Cloudpoint Technology Berhad
Performance |
| Timeline |
| ES Ceramics Technology |
| Cloudpoint Technology |
ES Ceramics and Cloudpoint Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Cloudpoint Technology
The main advantage of trading using opposite ES Ceramics and Cloudpoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Cloudpoint 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 Cloudpoint Technology will offset losses from the drop in Cloudpoint Technology's long position.| ES Ceramics vs. Malaysia Steel Works | ES Ceramics vs. Al Aqar Healthcare | ES Ceramics vs. KPJ Healthcare Bhd | ES Ceramics vs. British American Tobacco |
| Cloudpoint Technology vs. BP Plastics Holding | Cloudpoint Technology vs. Kluang Rubber | Cloudpoint Technology vs. Greatech Technology Bhd | Cloudpoint Technology vs. CPE 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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