Correlation Between ES Ceramics and Computer Forms
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on ES Ceramics and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Computer Forms.
Diversification Opportunities for ES Ceramics and Computer Forms
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0100 and Computer is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms Bhd 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and Computer Forms go up and down completely randomly.
Pair Corralation between ES Ceramics and Computer Forms
Assuming the 90 days trading horizon ES Ceramics Technology is expected to generate 0.77 times more return on investment than Computer Forms. However, ES Ceramics Technology is 1.3 times less risky than Computer Forms. It trades about -0.13 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.13 per unit of risk. If you would invest 16.00 in ES Ceramics Technology on November 3, 2024 and sell it today you would lose (2.00) from holding ES Ceramics Technology or give up 12.5% 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. Computer Forms Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| Computer Forms Bhd |
ES Ceramics and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Computer Forms
The main advantage of trading using opposite ES Ceramics and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.| ES Ceramics vs. BP Plastics Holding | ES Ceramics vs. Choo Bee Metal | ES Ceramics vs. Silver Ridge Holdings | ES Ceramics vs. Rubberex M |
| Computer Forms vs. Lotte Chemical Titan | Computer Forms vs. Nova Wellness Group | Computer Forms vs. Oriental Food Industries | Computer Forms vs. Kawan Food Bhd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |