Correlation Between Sungei Bagan and CB Industrial
Can any of the company-specific risk be diversified away by investing in both Sungei Bagan and CB 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 Sungei Bagan and CB Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungei Bagan Rubber and CB Industrial Product, you can compare the effects of market volatilities on Sungei Bagan and CB 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 Sungei Bagan with a short position of CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungei Bagan and CB Industrial.
Diversification Opportunities for Sungei Bagan and CB Industrial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sungei and 7076 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sungei Bagan Rubber and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product and Sungei Bagan 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 Sungei Bagan Rubber are associated (or correlated) with CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of Sungei Bagan i.e., Sungei Bagan and CB Industrial go up and down completely randomly.
Pair Corralation between Sungei Bagan and CB Industrial
Assuming the 90 days trading horizon Sungei Bagan Rubber is expected to under-perform the CB Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Sungei Bagan Rubber is 1.96 times less risky than CB Industrial. The stock trades about -0.67 of its potential returns per unit of risk. The CB Industrial Product is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 128.00 in CB Industrial Product on August 29, 2024 and sell it today you would earn a total of 6.00 from holding CB Industrial Product or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungei Bagan Rubber vs. CB Industrial Product
Performance |
| Timeline |
| Sungei Bagan Rubber |
| CB Industrial Product |
Sungei Bagan and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungei Bagan and CB Industrial
The main advantage of trading using opposite Sungei Bagan and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungei Bagan position performs unexpectedly, CB 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| Sungei Bagan vs. British American Tobacco | Sungei Bagan vs. Oriental Food Industries | Sungei Bagan vs. Nova Wellness Group |
| CB Industrial vs. Uwc Bhd | CB Industrial vs. Genetec Technology Bhd | CB Industrial vs. JF Technology BHD | CB Industrial vs. MyTech Group 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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