Correlation Between CPE Technology and Greatech Technology
Can any of the company-specific risk be diversified away by investing in both CPE Technology and Greatech 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 CPE Technology and Greatech Technology 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 Greatech Technology Bhd, you can compare the effects of market volatilities on CPE Technology and Greatech 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 CPE Technology with a short position of Greatech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and Greatech Technology.
Diversification Opportunities for CPE Technology and Greatech Technology
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPE and Greatech is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and Greatech Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatech Technology 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 Greatech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatech Technology Bhd has no effect on the direction of CPE Technology i.e., CPE Technology and Greatech Technology go up and down completely randomly.
Pair Corralation between CPE Technology and Greatech Technology
Assuming the 90 days trading horizon CPE Technology Berhad is expected to generate 1.49 times more return on investment than Greatech Technology. However, CPE Technology is 1.49 times more volatile than Greatech Technology Bhd. It trades about 0.01 of its potential returns per unit of risk. Greatech Technology Bhd is currently generating about -0.01 per unit of risk. If you would invest 91.00 in CPE Technology Berhad on September 3, 2024 and sell it today you would lose (1.00) from holding CPE Technology Berhad or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.21% |
| Values | Daily Returns |
CPE Technology Berhad vs. Greatech Technology Bhd
Performance |
| Timeline |
| CPE Technology Berhad |
| Greatech Technology Bhd |
CPE Technology and Greatech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and Greatech Technology
The main advantage of trading using opposite CPE Technology and Greatech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, Greatech 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 Greatech Technology will offset losses from the drop in Greatech Technology's long position.| CPE Technology vs. PIE Industrial Bhd | CPE Technology vs. Choo Bee Metal | CPE Technology vs. Sports Toto Berhad | CPE Technology vs. K One Technology Bhd |
| Greatech Technology vs. Genetec Technology Bhd | Greatech Technology vs. PIE Industrial Bhd | Greatech Technology vs. Dufu Tech Corp | Greatech Technology vs. Supercomnet Technologies 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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