Correlation Between CB Industrial and Greatech Technology
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Greatech 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 CB Industrial and Greatech Technology 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 Greatech Technology Bhd, you can compare the effects of market volatilities on CB Industrial and Greatech 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 CB Industrial with a short position of Greatech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Greatech Technology.
Diversification Opportunities for CB Industrial and Greatech Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 7076 and Greatech is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Greatech Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatech Technology 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 Greatech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatech Technology Bhd has no effect on the direction of CB Industrial i.e., CB Industrial and Greatech Technology go up and down completely randomly.
Pair Corralation between CB Industrial and Greatech Technology
Assuming the 90 days trading horizon CB Industrial Product is expected to generate 0.43 times more return on investment than Greatech Technology. However, CB Industrial Product is 2.31 times less risky than Greatech Technology. It trades about 0.18 of its potential returns per unit of risk. Greatech Technology Bhd is currently generating about -0.01 per unit of risk. If you would invest 128.00 in CB Industrial Product on August 28, 2024 and sell it today you would earn a total of 6.00 from holding CB Industrial Product or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Industrial Product vs. Greatech Technology Bhd
Performance |
| Timeline |
| CB Industrial Product |
| Greatech Technology Bhd |
CB Industrial and Greatech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Greatech Technology
The main advantage of trading using opposite CB Industrial and Greatech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Greatech 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 Greatech Technology will offset losses from the drop in Greatech Technology's long position.The idea behind CB Industrial Product and Greatech Technology Bhd 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.| Greatech Technology vs. K One Technology Bhd | Greatech Technology vs. Petronas Chemicals Group | Greatech Technology vs. Coraza Integrated Technology | Greatech Technology vs. ES Ceramics Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |