Correlation Between CPE Technology and Kawan Food
Can any of the company-specific risk be diversified away by investing in both CPE Technology and Kawan Food 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 Kawan Food 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 Kawan Food Bhd, you can compare the effects of market volatilities on CPE Technology and Kawan Food 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 Kawan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and Kawan Food.
Diversification Opportunities for CPE Technology and Kawan Food
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPE and Kawan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and Kawan Food Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawan Food 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 Kawan Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawan Food Bhd has no effect on the direction of CPE Technology i.e., CPE Technology and Kawan Food go up and down completely randomly.
Pair Corralation between CPE Technology and Kawan Food
Assuming the 90 days trading horizon CPE Technology Berhad is expected to generate 1.89 times more return on investment than Kawan Food. However, CPE Technology is 1.89 times more volatile than Kawan Food Bhd. It trades about 0.09 of its potential returns per unit of risk. Kawan Food Bhd is currently generating about -0.09 per unit of risk. If you would invest 94.00 in CPE Technology Berhad on November 1, 2024 and sell it today you would earn a total of 3.00 from holding CPE Technology Berhad or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPE Technology Berhad vs. Kawan Food Bhd
Performance |
| Timeline |
| CPE Technology Berhad |
| Kawan Food Bhd |
CPE Technology and Kawan Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and Kawan Food
The main advantage of trading using opposite CPE Technology and Kawan Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, Kawan Food 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 Kawan Food will offset losses from the drop in Kawan Food's long position.| CPE Technology vs. ONETECH SOLUTIONS HOLDINGS | CPE Technology vs. EA Technique M | CPE Technology vs. Kobay Tech Bhd | CPE Technology vs. Globetronics Tech Bhd |
| Kawan Food vs. Southern Steel Bhd | Kawan Food vs. Awanbiru Technology Bhd | Kawan Food vs. BP Plastics Holding | Kawan Food vs. CPE Technology 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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