Correlation Between CB Industrial and Star Media
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Star Media 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 Star Media 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 Star Media Group, you can compare the effects of market volatilities on CB Industrial and Star Media 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 Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Star Media.
Diversification Opportunities for CB Industrial and Star Media
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 7076 and Star is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Star Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Media Group 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 Star Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Media Group has no effect on the direction of CB Industrial i.e., CB Industrial and Star Media go up and down completely randomly.
Pair Corralation between CB Industrial and Star Media
Assuming the 90 days trading horizon CB Industrial is expected to generate 1.14 times less return on investment than Star Media. But when comparing it to its historical volatility, CB Industrial Product is 1.42 times less risky than Star Media. It trades about 0.09 of its potential returns per unit of risk. Star Media Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Star Media Group on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Star Media Group or generate 2.5% 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. Star Media Group
Performance |
| Timeline |
| CB Industrial Product |
| Star Media Group |
CB Industrial and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Star Media
The main advantage of trading using opposite CB Industrial and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Star Media 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 Star Media will offset losses from the drop in Star Media's long position.| CB Industrial vs. Radiant Globaltech Bhd | CB Industrial vs. Pantech Group Holdings | CB Industrial vs. Sunzen Biotech Bhd | CB Industrial vs. Datasonic Group Bhd |
| Star Media vs. Hong Leong Bank | Star Media vs. Cloudpoint Technology Berhad | Star Media vs. Eonmetall Group Bhd | Star Media vs. YX Precious Metals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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