Correlation Between Cloudpoint Technology and Daya Materials
Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and Daya Materials 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 Cloudpoint Technology and Daya Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloudpoint Technology Berhad and Daya Materials Bhd, you can compare the effects of market volatilities on Cloudpoint Technology and Daya Materials 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 Cloudpoint Technology with a short position of Daya Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and Daya Materials.
Diversification Opportunities for Cloudpoint Technology and Daya Materials
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cloudpoint and Daya is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd and Cloudpoint 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 Cloudpoint Technology Berhad are associated (or correlated) with Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and Daya Materials go up and down completely randomly.
Pair Corralation between Cloudpoint Technology and Daya Materials
Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 0.68 times more return on investment than Daya Materials. However, Cloudpoint Technology Berhad is 1.47 times less risky than Daya Materials. It trades about 0.07 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about 0.02 per unit of risk. If you would invest 76.00 in Cloudpoint Technology Berhad on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Cloudpoint Technology Berhad or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloudpoint Technology Berhad vs. Daya Materials Bhd
Performance |
| Timeline |
| Cloudpoint Technology |
| Daya Materials Bhd |
Cloudpoint Technology and Daya Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudpoint Technology and Daya Materials
The main advantage of trading using opposite Cloudpoint Technology and Daya Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, Daya Materials 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 Daya Materials will offset losses from the drop in Daya Materials' long position.| Cloudpoint Technology vs. Malayan Banking Bhd | Cloudpoint Technology vs. Public Bank Bhd | Cloudpoint Technology vs. Petronas Chemicals Group | Cloudpoint Technology vs. Tenaga Nasional Bhd |
| Daya Materials vs. Barakah Offshore Petroleum | Daya Materials vs. Digistar Bhd | Daya Materials vs. Minetech Resources Bhd | Daya Materials vs. OpenSys M 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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