Correlation Between Awanbiru Technology and CPE Technology
Can any of the company-specific risk be diversified away by investing in both Awanbiru Technology 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 Awanbiru Technology and CPE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awanbiru Technology Bhd and CPE Technology Berhad, you can compare the effects of market volatilities on Awanbiru Technology 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 Awanbiru Technology with a short position of CPE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awanbiru Technology and CPE Technology.
Diversification Opportunities for Awanbiru Technology and CPE Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Awanbiru and CPE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Awanbiru Technology 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 Awanbiru 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 Awanbiru Technology 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 Awanbiru Technology i.e., Awanbiru Technology and CPE Technology go up and down completely randomly.
Pair Corralation between Awanbiru Technology and CPE Technology
Assuming the 90 days trading horizon Awanbiru Technology Bhd is expected to under-perform the CPE Technology. But the stock apears to be less risky and, when comparing its historical volatility, Awanbiru Technology Bhd is 1.25 times less risky than CPE Technology. The stock trades about -0.12 of its potential returns per unit of risk. The CPE Technology Berhad is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 83.00 in CPE Technology Berhad on August 24, 2024 and sell it today you would earn a total of 11.00 from holding CPE Technology Berhad or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Awanbiru Technology Bhd vs. CPE Technology Berhad
Performance |
| Timeline |
| Awanbiru Technology Bhd |
| CPE Technology Berhad |
Awanbiru Technology and CPE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awanbiru Technology and CPE Technology
The main advantage of trading using opposite Awanbiru Technology and CPE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awanbiru Technology 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.| Awanbiru Technology vs. IHH Healthcare Bhd | Awanbiru Technology vs. Diversified Gateway Solutions | Awanbiru Technology vs. Datasonic Group Bhd | Awanbiru Technology vs. Sunway Construction Group |
| CPE Technology vs. Malayan Banking Bhd | CPE Technology vs. Public Bank Bhd | CPE Technology vs. Petronas Chemicals Group | CPE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |