Correlation Between Choo Bee and Eco World
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Eco World 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 Eco World 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 Eco World Develop, you can compare the effects of market volatilities on Choo Bee and Eco World 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 Eco World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Eco World.
Diversification Opportunities for Choo Bee and Eco World
Excellent diversification
The 3 months correlation between Choo and Eco is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Eco World Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco World Develop 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 Eco World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco World Develop has no effect on the direction of Choo Bee i.e., Choo Bee and Eco World go up and down completely randomly.
Pair Corralation between Choo Bee and Eco World
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Eco World. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 1.34 times less risky than Eco World. The stock trades about -0.02 of its potential returns per unit of risk. The Eco World Develop is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 69.00 in Eco World Develop on August 31, 2024 and sell it today you would earn a total of 113.00 from holding Eco World Develop or generate 163.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Eco World Develop
Performance |
| Timeline |
| Choo Bee Metal |
| Eco World Develop |
Choo Bee and Eco World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Eco World
The main advantage of trading using opposite Choo Bee and Eco World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Eco World 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 Eco World will offset losses from the drop in Eco World's long position.| Choo Bee vs. Melewar Industrial Group | Choo Bee vs. Awanbiru Technology Bhd | Choo Bee vs. PIE Industrial Bhd | Choo Bee vs. YX Precious Metals |
| Eco World vs. Amalgamated Industrial Steel | Eco World vs. Meridian Bhd | Eco World vs. Digistar Bhd | Eco World vs. Minetech Resources 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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