Correlation Between Media Prima and CPE Technology
Can any of the company-specific risk be diversified away by investing in both Media Prima and CPE Technology 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 Media Prima and CPE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Prima Bhd and CPE Technology Berhad, you can compare the effects of market volatilities on Media Prima and CPE Technology 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 Media Prima with a short position of CPE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Prima and CPE Technology.
Diversification Opportunities for Media Prima and CPE Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Media and CPE is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Media Prima Bhd and CPE Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPE Technology Berhad and Media Prima 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 Media Prima Bhd are associated (or correlated) with CPE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPE Technology Berhad has no effect on the direction of Media Prima i.e., Media Prima and CPE Technology go up and down completely randomly.
Pair Corralation between Media Prima and CPE Technology
Assuming the 90 days trading horizon Media Prima is expected to generate 7.96 times less return on investment than CPE Technology. But when comparing it to its historical volatility, Media Prima Bhd is 1.36 times less risky than CPE Technology. It trades about 0.01 of its potential returns per unit of risk. CPE Technology Berhad is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 94.00 in CPE Technology Berhad on November 5, 2024 and sell it today you would earn a total of 1.00 from holding CPE Technology Berhad or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Prima Bhd vs. CPE Technology Berhad
Performance |
| Timeline |
| Media Prima Bhd |
| CPE Technology Berhad |
Media Prima and CPE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Prima and CPE Technology
The main advantage of trading using opposite Media Prima and CPE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Prima position performs unexpectedly, CPE Technology 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 CPE Technology will offset losses from the drop in CPE Technology's long position.| Media Prima vs. Cengild Medical Berhad | Media Prima vs. Southern Steel Bhd | Media Prima vs. CB Industrial Product | Media Prima vs. Mycron Steel Bhd |
| CPE Technology vs. Star Media Group | CPE Technology vs. Senheng New Retail | CPE Technology vs. Greatech Technology Bhd | CPE Technology vs. Apex Healthcare 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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