Correlation Between CB Industrial and MI Technovation
Can any of the company-specific risk be diversified away by investing in both CB Industrial and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on CB Industrial and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and MI Technovation.
Diversification Opportunities for CB Industrial and MI Technovation
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between 7076 and 5286 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of CB Industrial i.e., CB Industrial and MI Technovation go up and down completely randomly.
Pair Corralation between CB Industrial and MI Technovation
Assuming the 90 days trading horizon CB Industrial Product is expected to under-perform the MI Technovation. But the stock apears to be less risky and, when comparing its historical volatility, CB Industrial Product is 1.49 times less risky than MI Technovation. The stock trades about -0.15 of its potential returns per unit of risk. The MI Technovation Bhd is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 224.00 in MI Technovation Bhd on October 22, 2024 and sell it today you would lose (3.00) from holding MI Technovation Bhd or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Industrial Product vs. MI Technovation Bhd
Performance |
| Timeline |
| CB Industrial Product |
| MI Technovation Bhd |
CB Industrial and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and MI Technovation
The main advantage of trading using opposite CB Industrial and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| CB Industrial vs. Silver Ridge Holdings | CB Industrial vs. Magni Tech Industries | CB Industrial vs. Sports Toto Berhad | CB Industrial vs. MI Technovation Bhd |
| MI Technovation vs. Cengild Medical Berhad | MI Technovation vs. Daya Materials Bhd | MI Technovation vs. Kluang Rubber | MI Technovation vs. CB Industrial Product |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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