Correlation Between CPE Technology and Supercomnet Technologies
Can any of the company-specific risk be diversified away by investing in both CPE Technology and Supercomnet Technologies 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 CPE Technology and Supercomnet Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPE Technology Berhad and Supercomnet Technologies Bhd, you can compare the effects of market volatilities on CPE Technology and Supercomnet Technologies 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 CPE Technology with a short position of Supercomnet Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and Supercomnet Technologies.
Diversification Opportunities for CPE Technology and Supercomnet Technologies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CPE and Supercomnet is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and Supercomnet Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercomnet Technologies and CPE 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 CPE Technology Berhad are associated (or correlated) with Supercomnet Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercomnet Technologies has no effect on the direction of CPE Technology i.e., CPE Technology and Supercomnet Technologies go up and down completely randomly.
Pair Corralation between CPE Technology and Supercomnet Technologies
Assuming the 90 days trading horizon CPE Technology Berhad is expected to generate 1.8 times more return on investment than Supercomnet Technologies. However, CPE Technology is 1.8 times more volatile than Supercomnet Technologies Bhd. It trades about 0.04 of its potential returns per unit of risk. Supercomnet Technologies Bhd is currently generating about -0.26 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPE Technology Berhad vs. Supercomnet Technologies Bhd
Performance |
| Timeline |
| CPE Technology Berhad |
| Supercomnet Technologies |
CPE Technology and Supercomnet Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and Supercomnet Technologies
The main advantage of trading using opposite CPE Technology and Supercomnet Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, Supercomnet Technologies 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 Supercomnet Technologies will offset losses from the drop in Supercomnet Technologies' long position.| CPE Technology vs. Star Media Group | CPE Technology vs. Senheng New Retail | CPE Technology vs. Greatech Technology Bhd | CPE Technology vs. Apex Healthcare Bhd |
| Supercomnet Technologies vs. Petronas Chemicals Group | Supercomnet Technologies vs. CB Industrial Product | Supercomnet Technologies vs. Choo Bee Metal | Supercomnet Technologies vs. YTL Hospitality REIT |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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