Correlation Between CPE Technology and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both CPE Technology and Lysaght Galvanized 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 Lysaght Galvanized 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 Lysaght Galvanized Steel, you can compare the effects of market volatilities on CPE Technology and Lysaght Galvanized 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 Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPE Technology and Lysaght Galvanized.
Diversification Opportunities for CPE Technology and Lysaght Galvanized
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CPE and Lysaght is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CPE Technology Berhad and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel 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 Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of CPE Technology i.e., CPE Technology and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between CPE Technology and Lysaght Galvanized
Assuming the 90 days trading horizon CPE Technology Berhad is expected to generate 1.16 times more return on investment than Lysaght Galvanized. However, CPE Technology is 1.16 times more volatile than Lysaght Galvanized Steel. It trades about 0.04 of its potential returns per unit of risk. Lysaght Galvanized Steel is currently generating about -0.2 per unit of risk. If you would invest 94.00 in CPE Technology Berhad on November 5, 2024 and sell it today you would earn a total of 1.00 from holding CPE Technology Berhad or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
CPE Technology Berhad vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| CPE Technology Berhad |
| Lysaght Galvanized Steel |
CPE Technology and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPE Technology and Lysaght Galvanized
The main advantage of trading using opposite CPE Technology and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE Technology position performs unexpectedly, Lysaght Galvanized 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 Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized's long position.| CPE Technology vs. Star Media Group | CPE Technology vs. Berjaya Food Bhd | CPE Technology vs. Kawan Food Bhd | CPE Technology vs. Sports Toto Berhad |
| Lysaght Galvanized vs. Magni Tech Industries | Lysaght Galvanized vs. Cosmos Technology International | Lysaght Galvanized vs. MI Technovation Bhd | Lysaght Galvanized vs. Globetronics Tech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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