Correlation Between Cloudpoint Technology and Melewar Industrial
Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and Melewar 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 Cloudpoint Technology and Melewar Industrial 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 Melewar Industrial Group, you can compare the effects of market volatilities on Cloudpoint Technology and Melewar 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 Cloudpoint Technology with a short position of Melewar Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and Melewar Industrial.
Diversification Opportunities for Cloudpoint Technology and Melewar Industrial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cloudpoint and Melewar is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and Melewar Industrial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melewar Industrial 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 Melewar Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melewar Industrial has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and Melewar Industrial go up and down completely randomly.
Pair Corralation between Cloudpoint Technology and Melewar Industrial
Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 1.18 times more return on investment than Melewar Industrial. However, Cloudpoint Technology is 1.18 times more volatile than Melewar Industrial Group. It trades about 0.23 of its potential returns per unit of risk. Melewar Industrial Group is currently generating about -0.11 per unit of risk. If you would invest 82.00 in Cloudpoint Technology Berhad on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Cloudpoint Technology Berhad or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloudpoint Technology Berhad vs. Melewar Industrial Group
Performance |
| Timeline |
| Cloudpoint Technology |
| Melewar Industrial |
Cloudpoint Technology and Melewar Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudpoint Technology and Melewar Industrial
The main advantage of trading using opposite Cloudpoint Technology and Melewar Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, Melewar 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 Melewar Industrial will offset losses from the drop in Melewar Industrial's 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 |
| Melewar Industrial vs. Press Metal Bhd | Melewar Industrial vs. PMB Technology Bhd | Melewar Industrial vs. Pantech Group Holdings | Melewar Industrial vs. CSC Steel Holdings |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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