Correlation Between MClean Technologies and Computer Forms
Can any of the company-specific risk be diversified away by investing in both MClean Technologies 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 MClean Technologies and Computer Forms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MClean Technologies Bhd and Computer Forms Bhd, you can compare the effects of market volatilities on MClean Technologies 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 MClean Technologies with a short position of Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and Computer Forms.
Diversification Opportunities for MClean Technologies and Computer Forms
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MClean and Computer is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies Bhd 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 MClean Technologies 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 MClean Technologies Bhd 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 MClean Technologies i.e., MClean Technologies and Computer Forms go up and down completely randomly.
Pair Corralation between MClean Technologies and Computer Forms
Assuming the 90 days trading horizon MClean Technologies Bhd is expected to generate 0.75 times more return on investment than Computer Forms. However, MClean Technologies Bhd is 1.34 times less risky than Computer Forms. It trades about -0.15 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.19 per unit of risk. If you would invest 32.00 in MClean Technologies Bhd on November 2, 2024 and sell it today you would lose (4.00) from holding MClean Technologies Bhd or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MClean Technologies Bhd vs. Computer Forms Bhd
Performance |
| Timeline |
| MClean Technologies Bhd |
| Computer Forms Bhd |
MClean Technologies and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MClean Technologies and Computer Forms
The main advantage of trading using opposite MClean Technologies and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies 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.| MClean Technologies vs. MI Technovation Bhd | MClean Technologies vs. Resintech Bhd | MClean Technologies vs. Bank Islam Malaysia | MClean Technologies vs. Southern Steel Bhd |
| Computer Forms vs. PMB Technology Bhd | Computer Forms vs. Binasat Communications Bhd | Computer Forms vs. YX Precious Metals | Computer Forms vs. Dataprep Holdings 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 Stocks Directory module to find actively traded stocks across global markets.
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