Correlation Between Choo Bee and Systech Bhd
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Systech Bhd 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 Choo Bee and Systech Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Systech Bhd, you can compare the effects of market volatilities on Choo Bee and Systech Bhd 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 Choo Bee with a short position of Systech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Systech Bhd.
Diversification Opportunities for Choo Bee and Systech Bhd
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choo and Systech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Systech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systech Bhd and Choo Bee 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 Choo Bee Metal are associated (or correlated) with Systech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systech Bhd has no effect on the direction of Choo Bee i.e., Choo Bee and Systech Bhd go up and down completely randomly.
Pair Corralation between Choo Bee and Systech Bhd
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Systech Bhd. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 1.76 times less risky than Systech Bhd. The stock trades about -0.02 of its potential returns per unit of risk. The Systech Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Systech Bhd on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Systech Bhd or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Systech Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| Systech Bhd |
Choo Bee and Systech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Systech Bhd
The main advantage of trading using opposite Choo Bee and Systech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Systech Bhd 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 Systech Bhd will offset losses from the drop in Systech Bhd's long position.| Choo Bee vs. Press Metal Bhd | Choo Bee vs. PMB Technology Bhd | Choo Bee vs. Pantech Group Holdings | Choo Bee vs. CSC Steel Holdings |
| Systech Bhd vs. Datasonic Group Bhd | Systech Bhd vs. Awanbiru Technology Bhd | Systech Bhd vs. Dataprep Holdings Bhd | Systech Bhd vs. TechnoDex 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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