Correlation Between CB Industrial and Choo Bee
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Choo Bee 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 Choo Bee 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 Choo Bee Metal, you can compare the effects of market volatilities on CB Industrial and Choo Bee 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 Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Choo Bee.
Diversification Opportunities for CB Industrial and Choo Bee
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 7076 and Choo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal 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 Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of CB Industrial i.e., CB Industrial and Choo Bee go up and down completely randomly.
Pair Corralation between CB Industrial and Choo Bee
Assuming the 90 days trading horizon CB Industrial Product is expected to under-perform the Choo Bee. In addition to that, CB Industrial is 1.0 times more volatile than Choo Bee Metal. It trades about -0.2 of its total potential returns per unit of risk. Choo Bee Metal is currently generating about -0.04 per unit of volatility. If you would invest 70.00 in Choo Bee Metal on October 23, 2024 and sell it today you would lose (1.00) from holding Choo Bee Metal or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
CB Industrial Product vs. Choo Bee Metal
Performance |
| Timeline |
| CB Industrial Product |
| Choo Bee Metal |
CB Industrial and Choo Bee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Choo Bee
The main advantage of trading using opposite CB Industrial and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee's long position.| CB Industrial vs. Star Media Group | CB Industrial vs. Silver Ridge Holdings | CB Industrial vs. Systech Bhd | CB Industrial vs. Cloudpoint Technology Berhad |
| Choo Bee vs. Kluang Rubber | Choo Bee vs. Kossan Rubber Industries | Choo Bee vs. Malaysia Steel Works | Choo Bee vs. BP Plastics Holding |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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