Correlation Between CPE Technology and Tex Cycle
Can any of the company-specific risk be diversified away by investing in both CPE Technology and Tex Cycle 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 Tex Cycle 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 Tex Cycle Technology, you can compare the effects of market volatilities on CPE Technology and Tex Cycle 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 Tex Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and Tex Cycle.
Diversification Opportunities for CPE Technology and Tex Cycle
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between CPE and Tex is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and Tex Cycle Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Cycle Technology 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 Tex Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Cycle Technology has no effect on the direction of CPE Technology i.e., CPE Technology and Tex Cycle go up and down completely randomly.
Pair Corralation between CPE Technology and Tex Cycle
Assuming the 90 days trading horizon CPE Technology Berhad is expected to generate 1.81 times more return on investment than Tex Cycle. However, CPE Technology is 1.81 times more volatile than Tex Cycle Technology. It trades about -0.01 of its potential returns per unit of risk. Tex Cycle Technology is currently generating about -0.12 per unit of risk. If you would invest 104.00 in CPE Technology Berhad on November 2, 2024 and sell it today you would lose (7.00) from holding CPE Technology Berhad or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPE Technology Berhad vs. Tex Cycle Technology
Performance |
| Timeline |
| CPE Technology Berhad |
| Tex Cycle Technology |
CPE Technology and Tex Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and Tex Cycle
The main advantage of trading using opposite CPE Technology and Tex Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, Tex Cycle 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 Tex Cycle will offset losses from the drop in Tex Cycle's long position.| CPE Technology vs. KPJ Healthcare Bhd | CPE Technology vs. Sapura Industrial Bhd | CPE Technology vs. Diversified Gateway Solutions | CPE Technology vs. Carlsberg Brewery Malaysia |
| Tex Cycle vs. PIE Industrial Bhd | Tex Cycle vs. Radiant Globaltech Bhd | Tex Cycle vs. YX Precious Metals | Tex Cycle vs. MI Technovation 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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