Correlation Between CPE Technology and YX Precious
Can any of the company-specific risk be diversified away by investing in both CPE Technology and YX Precious 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 YX Precious 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 YX Precious Metals, you can compare the effects of market volatilities on CPE Technology and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and YX Precious.
Diversification Opportunities for CPE Technology and YX Precious
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPE and 0250 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of CPE Technology i.e., CPE Technology and YX Precious go up and down completely randomly.
Pair Corralation between CPE Technology and YX Precious
Assuming the 90 days trading horizon CPE Technology Berhad is expected to under-perform the YX Precious. But the stock apears to be less risky and, when comparing its historical volatility, CPE Technology Berhad is 1.69 times less risky than YX Precious. The stock trades about -0.42 of its potential returns per unit of risk. The YX Precious Metals is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 24.00 in YX Precious Metals on November 28, 2024 and sell it today you would lose (1.00) from holding YX Precious Metals or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPE Technology Berhad vs. YX Precious Metals
Performance |
| Timeline |
| CPE Technology Berhad |
| YX Precious Metals |
CPE Technology and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and YX Precious
The main advantage of trading using opposite CPE Technology and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' 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 |
| YX Precious vs. Berjaya Food Bhd | YX Precious vs. Rubberex M | YX Precious vs. PMB Technology Bhd | YX Precious vs. Steel Hawk Berhad |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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