Correlation Between Cloudpoint Technology and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on Cloudpoint Technology and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and Computer Forms.
Diversification Opportunities for Cloudpoint Technology and Computer Forms
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cloudpoint and Computer is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and Computer Forms go up and down completely randomly.
Pair Corralation between Cloudpoint Technology and Computer Forms
Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 0.51 times more return on investment than Computer Forms. However, Cloudpoint Technology Berhad is 1.95 times less risky than Computer Forms. It trades about 0.06 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.09 per unit of risk. If you would invest 50.00 in Cloudpoint Technology Berhad on August 27, 2024 and sell it today you would earn a total of 33.00 from holding Cloudpoint Technology Berhad or generate 66.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.15% |
| Values | Daily Returns |
Cloudpoint Technology Berhad vs. Computer Forms Bhd
Performance |
| Timeline |
| Cloudpoint Technology |
| Computer Forms Bhd |
Cloudpoint Technology and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudpoint Technology and Computer Forms
The main advantage of trading using opposite Cloudpoint Technology and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' 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 |
| Computer Forms vs. Digistar Bhd | Computer Forms vs. Minetech Resources Bhd | Computer Forms vs. OpenSys M Bhd | Computer Forms vs. Insas 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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