Correlation Between Globetronics Tech and CPE Technology
Can any of the company-specific risk be diversified away by investing in both Globetronics Tech and CPE Technology 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 Globetronics Tech and CPE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globetronics Tech Bhd and CPE Technology Berhad, you can compare the effects of market volatilities on Globetronics Tech and CPE Technology 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 Globetronics Tech with a short position of CPE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globetronics Tech and CPE Technology.
Diversification Opportunities for Globetronics Tech and CPE Technology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Globetronics and CPE is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Globetronics Tech Bhd and CPE Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPE Technology Berhad and Globetronics Tech 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 Globetronics Tech Bhd are associated (or correlated) with CPE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPE Technology Berhad has no effect on the direction of Globetronics Tech i.e., Globetronics Tech and CPE Technology go up and down completely randomly.
Pair Corralation between Globetronics Tech and CPE Technology
Assuming the 90 days trading horizon Globetronics Tech Bhd is expected to under-perform the CPE Technology. But the stock apears to be less risky and, when comparing its historical volatility, Globetronics Tech Bhd is 1.07 times less risky than CPE Technology. The stock trades about -0.26 of its potential returns per unit of risk. The CPE Technology Berhad is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 95.00 in CPE Technology Berhad on November 9, 2024 and sell it today you would lose (3.00) from holding CPE Technology Berhad or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globetronics Tech Bhd vs. CPE Technology Berhad
Performance |
| Timeline |
| Globetronics Tech Bhd |
| CPE Technology Berhad |
Globetronics Tech and CPE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globetronics Tech and CPE Technology
The main advantage of trading using opposite Globetronics Tech and CPE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globetronics Tech position performs unexpectedly, CPE Technology 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 CPE Technology will offset losses from the drop in CPE Technology's long position.| Globetronics Tech vs. Magni Tech Industries | Globetronics Tech vs. Cosmos Technology International | Globetronics Tech vs. MI Technovation Bhd | Globetronics Tech vs. Dnonce Tech Bhd |
| CPE Technology vs. Sports Toto Berhad | CPE Technology vs. Steel Hawk Berhad | CPE Technology vs. Lysaght Galvanized Steel | CPE Technology vs. Press Metal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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