Correlation Between CPE Technology and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both CPE Technology and MClean 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 MClean 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 MClean Technologies Bhd, you can compare the effects of market volatilities on CPE Technology and MClean 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 MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and MClean Technologies.
Diversification Opportunities for CPE Technology and MClean Technologies
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CPE and MClean is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd 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 MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of CPE Technology i.e., CPE Technology and MClean Technologies go up and down completely randomly.
Pair Corralation between CPE Technology and MClean Technologies
Assuming the 90 days trading horizon CPE Technology Berhad is expected to under-perform the MClean Technologies. But the stock apears to be less risky and, when comparing its historical volatility, CPE Technology Berhad is 1.92 times less risky than MClean Technologies. The stock trades about -0.42 of its potential returns per unit of risk. The MClean Technologies Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 29.00 in MClean Technologies Bhd on November 28, 2024 and sell it today you would earn a total of 0.00 from holding MClean Technologies Bhd or generate 0.0% 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. MClean Technologies Bhd
Performance |
| Timeline |
| CPE Technology Berhad |
| MClean Technologies Bhd |
CPE Technology and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and MClean Technologies
The main advantage of trading using opposite CPE Technology and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, MClean 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| CPE Technology vs. Melewar Industrial Group | CPE Technology vs. Kossan Rubber Industries | CPE Technology vs. Sports Toto Berhad | CPE Technology vs. Kluang Rubber |
| MClean Technologies vs. Sunway Construction Group | MClean Technologies vs. DC HEALTHCARE HOLDINGS | MClean Technologies vs. Sports Toto Berhad | MClean Technologies vs. TAS Offshore 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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