Correlation Between Cloudpoint Technology and British American
Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on Cloudpoint Technology and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and British American.
Diversification Opportunities for Cloudpoint Technology and British American
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cloudpoint and British is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and British American go up and down completely randomly.
Pair Corralation between Cloudpoint Technology and British American
Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 2.44 times more return on investment than British American. However, Cloudpoint Technology is 2.44 times more volatile than British American Tobacco. It trades about 0.05 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.04 per unit of risk. If you would invest 80.00 in Cloudpoint Technology Berhad on October 17, 2024 and sell it today you would earn a total of 15.00 from holding Cloudpoint Technology Berhad or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloudpoint Technology Berhad vs. British American Tobacco
Performance |
| Timeline |
| Cloudpoint Technology |
| British American Tobacco |
Cloudpoint Technology and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudpoint Technology and British American
The main advantage of trading using opposite Cloudpoint Technology and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, British American 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 British American will offset losses from the drop in British American'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 |
| British American vs. K One Technology Bhd | British American vs. Cloudpoint Technology Berhad | British American vs. Supercomnet Technologies Bhd | British American vs. SFP Tech 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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