Correlation Between Cengild Medical and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Cengild Medical and ES Ceramics 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 Cengild Medical and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cengild Medical Berhad and ES Ceramics Technology, you can compare the effects of market volatilities on Cengild Medical and ES Ceramics 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 Cengild Medical with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cengild Medical and ES Ceramics.
Diversification Opportunities for Cengild Medical and ES Ceramics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cengild and 0100 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Cengild Medical 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 Cengild Medical Berhad are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Cengild Medical i.e., Cengild Medical and ES Ceramics go up and down completely randomly.
Pair Corralation between Cengild Medical and ES Ceramics
Assuming the 90 days trading horizon Cengild Medical Berhad is expected to generate 0.46 times more return on investment than ES Ceramics. However, Cengild Medical Berhad is 2.19 times less risky than ES Ceramics. It trades about 0.1 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.14 per unit of risk. If you would invest 27.00 in Cengild Medical Berhad on November 29, 2024 and sell it today you would earn a total of 1.00 from holding Cengild Medical Berhad or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cengild Medical Berhad vs. ES Ceramics Technology
Performance |
| Timeline |
| Cengild Medical Berhad |
| ES Ceramics Technology |
Cengild Medical and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cengild Medical and ES Ceramics
The main advantage of trading using opposite Cengild Medical and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cengild Medical position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Cengild Medical vs. YTL Hospitality REIT | Cengild Medical vs. Sunway Construction Group | Cengild Medical vs. CPE Technology Berhad | Cengild Medical vs. Farm Price Holdings |
| ES Ceramics vs. Malaysia Steel Works | ES Ceramics vs. Al Aqar Healthcare | ES Ceramics vs. KPJ Healthcare Bhd | ES Ceramics vs. British American Tobacco |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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