Correlation Between Cloudpoint Technology and Sunway Construction
Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and Sunway Construction 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 Sunway Construction 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 Sunway Construction Group, you can compare the effects of market volatilities on Cloudpoint Technology and Sunway Construction 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 Sunway Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and Sunway Construction.
Diversification Opportunities for Cloudpoint Technology and Sunway Construction
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cloudpoint and Sunway is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and Sunway Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway Construction 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 Sunway Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Construction has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and Sunway Construction go up and down completely randomly.
Pair Corralation between Cloudpoint Technology and Sunway Construction
Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 1.06 times more return on investment than Sunway Construction. However, Cloudpoint Technology is 1.06 times more volatile than Sunway Construction Group. It trades about 0.07 of its potential returns per unit of risk. Sunway Construction Group is currently generating about -0.06 per unit of risk. If you would invest 80.00 in Cloudpoint Technology Berhad on November 2, 2024 and sell it today you would earn a total of 14.00 from holding Cloudpoint Technology Berhad or generate 17.5% 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. Sunway Construction Group
Performance |
| Timeline |
| Cloudpoint Technology |
| Sunway Construction |
Cloudpoint Technology and Sunway Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudpoint Technology and Sunway Construction
The main advantage of trading using opposite Cloudpoint Technology and Sunway Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, Sunway Construction 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 Sunway Construction will offset losses from the drop in Sunway Construction's long position.| Cloudpoint Technology vs. Binasat Communications Bhd | Cloudpoint Technology vs. Kawan Food Bhd | Cloudpoint Technology vs. Hong Leong Bank | Cloudpoint Technology vs. Ho Hup Construction |
| Sunway Construction vs. Kluang Rubber | Sunway Construction vs. RHB Bank Bhd | Sunway Construction vs. Al Aqar Healthcare | Sunway Construction vs. Aeon Credit Service |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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