Correlation Between Choo Bee and Cengild Medical
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Cengild Medical 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 Cengild Medical 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 Cengild Medical Berhad, you can compare the effects of market volatilities on Choo Bee and Cengild Medical 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 Cengild Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Cengild Medical.
Diversification Opportunities for Choo Bee and Cengild Medical
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Choo and Cengild is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Cengild Medical Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cengild Medical Berhad 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 Cengild Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cengild Medical Berhad has no effect on the direction of Choo Bee i.e., Choo Bee and Cengild Medical go up and down completely randomly.
Pair Corralation between Choo Bee and Cengild Medical
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Cengild Medical. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 1.15 times less risky than Cengild Medical. The stock trades about -0.25 of its potential returns per unit of risk. The Cengild Medical Berhad is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Cengild Medical Berhad on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Cengild Medical Berhad or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Cengild Medical Berhad
Performance |
| Timeline |
| Choo Bee Metal |
| Cengild Medical Berhad |
Choo Bee and Cengild Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Cengild Medical
The main advantage of trading using opposite Choo Bee and Cengild Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Cengild Medical 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 Cengild Medical will offset losses from the drop in Cengild Medical's long position.The idea behind Choo Bee Metal and Cengild Medical Berhad pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cengild Medical vs. MClean Technologies Bhd | Cengild Medical vs. Supercomnet Technologies Bhd | Cengild Medical vs. Berjaya Food Bhd | Cengild Medical vs. FARM FRESH 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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