Correlation Between CPE Technology and Hartalega Holdings
Can any of the company-specific risk be diversified away by investing in both CPE Technology and Hartalega 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 Hartalega 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 Hartalega Holdings Bhd, you can compare the effects of market volatilities on CPE Technology and Hartalega 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 Hartalega Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and Hartalega Holdings.
Diversification Opportunities for CPE Technology and Hartalega Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPE and Hartalega is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and Hartalega Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartalega 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 Hartalega Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartalega Holdings Bhd has no effect on the direction of CPE Technology i.e., CPE Technology and Hartalega Holdings go up and down completely randomly.
Pair Corralation between CPE Technology and Hartalega Holdings
Assuming the 90 days trading horizon CPE Technology is expected to generate 6.88 times less return on investment than Hartalega Holdings. But when comparing it to its historical volatility, CPE Technology Berhad is 1.26 times less risky than Hartalega Holdings. It trades about 0.01 of its potential returns per unit of risk. Hartalega Holdings Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Hartalega Holdings Bhd on September 13, 2024 and sell it today you would earn a total of 222.00 from holding Hartalega Holdings Bhd or generate 131.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 51.76% |
| Values | Daily Returns |
CPE Technology Berhad vs. Hartalega Holdings Bhd
Performance |
| Timeline |
| CPE Technology Berhad |
| Hartalega Holdings Bhd |
CPE Technology and Hartalega Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and Hartalega Holdings
The main advantage of trading using opposite CPE Technology and Hartalega Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, Hartalega 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 Hartalega Holdings will offset losses from the drop in Hartalega 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 |
| Hartalega Holdings vs. FARM FRESH BERHAD | Hartalega Holdings vs. Mercury Industries Bhd | Hartalega Holdings vs. Central Industrial Corp | Hartalega Holdings vs. Press Metal 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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