Correlation Between Cengild Medical and MI Technovation
Can any of the company-specific risk be diversified away by investing in both Cengild Medical and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on Cengild Medical and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cengild Medical and MI Technovation.
Diversification Opportunities for Cengild Medical and MI Technovation
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cengild and 5286 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation Bhd 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Cengild Medical i.e., Cengild Medical and MI Technovation go up and down completely randomly.
Pair Corralation between Cengild Medical and MI Technovation
Assuming the 90 days trading horizon Cengild Medical Berhad is expected to generate 0.67 times more return on investment than MI Technovation. However, Cengild Medical Berhad is 1.5 times less risky than MI Technovation. It trades about 0.14 of its potential returns per unit of risk. MI Technovation Bhd is currently generating about -0.02 per unit of risk. If you would invest 27.00 in Cengild Medical Berhad on October 22, 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 Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cengild Medical Berhad vs. MI Technovation Bhd
Performance |
| Timeline |
| Cengild Medical Berhad |
| MI Technovation Bhd |
Cengild Medical and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cengild Medical and MI Technovation
The main advantage of trading using opposite Cengild Medical and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cengild Medical position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| Cengild Medical vs. Riverview Rubber Estates | Cengild Medical vs. Rubberex M | Cengild Medical vs. PIE Industrial Bhd | Cengild Medical vs. ECM Libra Financial |
| MI Technovation vs. Cengild Medical Berhad | MI Technovation vs. Daya Materials Bhd | MI Technovation vs. Kluang Rubber | MI Technovation vs. CB Industrial Product |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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