Correlation Between Greatech Technology and Cengild Medical
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Cengild Medical 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 Greatech Technology and Cengild Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and Cengild Medical Berhad, you can compare the effects of market volatilities on Greatech Technology and Cengild Medical 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 Greatech Technology with a short position of Cengild Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Cengild Medical.
Diversification Opportunities for Greatech Technology and Cengild Medical
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Greatech and Cengild is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Cengild Medical Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cengild Medical Berhad and Greatech 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 Greatech Technology Bhd are associated (or correlated) with Cengild Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cengild Medical Berhad has no effect on the direction of Greatech Technology i.e., Greatech Technology and Cengild Medical go up and down completely randomly.
Pair Corralation between Greatech Technology and Cengild Medical
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the Cengild Medical. In addition to that, Greatech Technology is 1.09 times more volatile than Cengild Medical Berhad. It trades about -0.33 of its total potential returns per unit of risk. Cengild Medical Berhad is currently generating about 0.01 per unit of volatility. If you would invest 28.00 in Cengild Medical Berhad on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Cengild Medical Berhad or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Cengild Medical Berhad
Performance |
| Timeline |
| Greatech Technology Bhd |
| Cengild Medical Berhad |
Greatech Technology and Cengild Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Cengild Medical
The main advantage of trading using opposite Greatech Technology and Cengild Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Cengild Medical 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 Cengild Medical will offset losses from the drop in Cengild Medical's long position.| Greatech Technology vs. Lotte Chemical Titan | Greatech Technology vs. Malayan Banking Bhd | Greatech Technology vs. Bank Islam Malaysia | Greatech Technology vs. Dufu Tech Corp |
| Cengild Medical vs. Choo Bee Metal | Cengild Medical vs. Kawan Food Bhd | Cengild Medical vs. SSF Home Group | Cengild Medical vs. Oriental Food Industries |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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