Correlation Between CPE Technology and AMMB Holdings
Can any of the company-specific risk be diversified away by investing in both CPE Technology and AMMB Holdings 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 AMMB Holdings 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 AMMB Holdings Bhd, you can compare the effects of market volatilities on CPE Technology and AMMB Holdings 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 AMMB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and AMMB Holdings.
Diversification Opportunities for CPE Technology and AMMB Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CPE and AMMB is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and AMMB Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMMB Holdings 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 AMMB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMMB Holdings Bhd has no effect on the direction of CPE Technology i.e., CPE Technology and AMMB Holdings go up and down completely randomly.
Pair Corralation between CPE Technology and AMMB Holdings
Assuming the 90 days trading horizon CPE Technology is expected to generate 5.54 times less return on investment than AMMB Holdings. In addition to that, CPE Technology is 1.76 times more volatile than AMMB Holdings Bhd. It trades about 0.03 of its total potential returns per unit of risk. AMMB Holdings Bhd is currently generating about 0.31 per unit of volatility. If you would invest 509.00 in AMMB Holdings Bhd on September 12, 2024 and sell it today you would earn a total of 54.00 from holding AMMB Holdings Bhd or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPE Technology Berhad vs. AMMB Holdings Bhd
Performance |
| Timeline |
| CPE Technology Berhad |
| AMMB Holdings Bhd |
CPE Technology and AMMB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and AMMB Holdings
The main advantage of trading using opposite CPE Technology and AMMB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, AMMB Holdings 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 AMMB Holdings will offset losses from the drop in AMMB Holdings' long position.| CPE Technology vs. Malayan Banking Bhd | CPE Technology vs. Public Bank Bhd | CPE Technology vs. Petronas Chemicals Group | CPE Technology vs. Tenaga Nasional Bhd |
| AMMB Holdings vs. Alliance Financial Group | AMMB Holdings vs. Aeon Credit Service | AMMB Holdings vs. Al Aqar Healthcare | AMMB Holdings vs. PMB Technology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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