Correlation Between OSK Holdings and Cloudpoint Technology
Can any of the company-specific risk be diversified away by investing in both OSK Holdings and Cloudpoint 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 OSK Holdings and Cloudpoint Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSK Holdings Bhd and Cloudpoint Technology Berhad, you can compare the effects of market volatilities on OSK Holdings and Cloudpoint 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 OSK Holdings with a short position of Cloudpoint Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSK Holdings and Cloudpoint Technology.
Diversification Opportunities for OSK Holdings and Cloudpoint Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OSK and Cloudpoint is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding OSK Holdings Bhd and Cloudpoint Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudpoint Technology and OSK Holdings 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 OSK Holdings Bhd are associated (or correlated) with Cloudpoint Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudpoint Technology has no effect on the direction of OSK Holdings i.e., OSK Holdings and Cloudpoint Technology go up and down completely randomly.
Pair Corralation between OSK Holdings and Cloudpoint Technology
Assuming the 90 days trading horizon OSK Holdings Bhd is expected to under-perform the Cloudpoint Technology. But the stock apears to be less risky and, when comparing its historical volatility, OSK Holdings Bhd is 2.46 times less risky than Cloudpoint Technology. The stock trades about -0.1 of its potential returns per unit of risk. The Cloudpoint Technology Berhad is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Cloudpoint Technology Berhad on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Cloudpoint Technology Berhad or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSK Holdings Bhd vs. Cloudpoint Technology Berhad
Performance |
| Timeline |
| OSK Holdings Bhd |
| Cloudpoint Technology |
OSK Holdings and Cloudpoint Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSK Holdings and Cloudpoint Technology
The main advantage of trading using opposite OSK Holdings and Cloudpoint Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSK Holdings position performs unexpectedly, Cloudpoint 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 Cloudpoint Technology will offset losses from the drop in Cloudpoint Technology's long position.| OSK Holdings vs. Sapura Energy Bhd | OSK Holdings vs. Genetec Technology Bhd | OSK Holdings vs. Supermax Bhd | OSK Holdings vs. MSCM Holdings Bhd |
| Cloudpoint Technology vs. Malayan Banking Bhd | Cloudpoint Technology vs. Public Bank Bhd | Cloudpoint Technology vs. Petronas Chemicals Group | Cloudpoint Technology vs. Tenaga Nasional 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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