Correlation Between CB Industrial and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both CB Industrial and MClean Technologies 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 CB Industrial and MClean Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CB Industrial Product and MClean Technologies Bhd, you can compare the effects of market volatilities on CB Industrial and MClean Technologies 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 CB Industrial with a short position of MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and MClean Technologies.
Diversification Opportunities for CB Industrial and MClean Technologies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 7076 and MClean is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and CB Industrial 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 CB Industrial Product are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of CB Industrial i.e., CB Industrial and MClean Technologies go up and down completely randomly.
Pair Corralation between CB Industrial and MClean Technologies
Assuming the 90 days trading horizon CB Industrial is expected to generate 3.0 times less return on investment than MClean Technologies. But when comparing it to its historical volatility, CB Industrial Product is 2.93 times less risky than MClean Technologies. It trades about 0.04 of its potential returns per unit of risk. MClean Technologies Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16.00 in MClean Technologies Bhd on August 31, 2024 and sell it today you would earn a total of 8.00 from holding MClean Technologies Bhd or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.28% |
| Values | Daily Returns |
CB Industrial Product vs. MClean Technologies Bhd
Performance |
| Timeline |
| CB Industrial Product |
| MClean Technologies Bhd |
CB Industrial and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and MClean Technologies
The main advantage of trading using opposite CB Industrial and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, MClean Technologies 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| CB Industrial vs. Greatech Technology Bhd | CB Industrial vs. Genetec Technology Bhd | CB Industrial vs. PIE Industrial Bhd | CB Industrial vs. Supercomnet Technologies Bhd |
| MClean Technologies vs. PMB Technology Bhd | MClean Technologies vs. MyTech Group Bhd | MClean Technologies vs. YX Precious Metals | MClean Technologies vs. Farm Price Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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