Correlation Between Greatech Technology and CB Industrial
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and CB Industrial 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 CB Industrial 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 CB Industrial Product, you can compare the effects of market volatilities on Greatech Technology and CB Industrial 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 CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and CB Industrial.
Diversification Opportunities for Greatech Technology and CB Industrial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greatech and 7076 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product 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 CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of Greatech Technology i.e., Greatech Technology and CB Industrial go up and down completely randomly.
Pair Corralation between Greatech Technology and CB Industrial
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the CB Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Greatech Technology Bhd is 1.06 times less risky than CB Industrial. The stock trades about -0.32 of its potential returns per unit of risk. The CB Industrial Product is currently generating about -0.26 of returns per unit of risk over similar time horizon. If you would invest 126.00 in CB Industrial Product on November 18, 2024 and sell it today you would lose (13.00) from holding CB Industrial Product or give up 10.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. CB Industrial Product
Performance |
| Timeline |
| Greatech Technology Bhd |
| CB Industrial Product |
Greatech Technology and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and CB Industrial
The main advantage of trading using opposite Greatech Technology and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, CB Industrial 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| Greatech Technology vs. Uwc Bhd | Greatech Technology vs. Genetec Technology Bhd | Greatech Technology vs. PIE Industrial Bhd | Greatech Technology vs. Dufu Tech Corp |
| CB Industrial vs. Binasat Communications Bhd | CB Industrial vs. Petronas Chemicals Group | CB Industrial vs. KPJ Healthcare Bhd | CB Industrial vs. Mercury Industries 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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