Correlation Between MI Technovation and CPE Technology
Can any of the company-specific risk be diversified away by investing in both MI Technovation 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 MI Technovation and CPE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and CPE Technology Berhad, you can compare the effects of market volatilities on MI Technovation 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 MI Technovation with a short position of CPE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and CPE Technology.
Diversification Opportunities for MI Technovation and CPE Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5286 and CPE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation 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 MI Technovation 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 MI Technovation 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 MI Technovation i.e., MI Technovation and CPE Technology go up and down completely randomly.
Pair Corralation between MI Technovation and CPE Technology
Assuming the 90 days trading horizon MI Technovation Bhd is expected to under-perform the CPE Technology. In addition to that, MI Technovation is 1.28 times more volatile than CPE Technology Berhad. It trades about -0.04 of its total potential returns per unit of risk. CPE Technology Berhad is currently generating about 0.04 per unit of volatility. 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. CPE Technology Berhad
Performance |
| Timeline |
| MI Technovation Bhd |
| CPE Technology Berhad |
MI Technovation and CPE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Technovation and CPE Technology
The main advantage of trading using opposite MI Technovation and CPE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation 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.| MI Technovation vs. ViTrox Bhd | MI Technovation vs. Globetronics Tech Bhd | MI Technovation vs. AirAsia X Bhd | MI Technovation vs. Tambun Indah Land |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Stocks Directory Find actively traded stocks across global markets |