Correlation Between CB Industrial and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both CB Industrial and PIE Industrial 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 PIE Industrial 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 PIE Industrial Bhd, you can compare the effects of market volatilities on CB Industrial and PIE Industrial 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 PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and PIE Industrial.
Diversification Opportunities for CB Industrial and PIE Industrial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 7076 and PIE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial 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 PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of CB Industrial i.e., CB Industrial and PIE Industrial go up and down completely randomly.
Pair Corralation between CB Industrial and PIE Industrial
Assuming the 90 days trading horizon CB Industrial Product is expected to generate 0.74 times more return on investment than PIE Industrial. However, CB Industrial Product is 1.36 times less risky than PIE Industrial. It trades about -0.35 of its potential returns per unit of risk. PIE Industrial Bhd is currently generating about -0.51 per unit of risk. If you would invest 131.00 in CB Industrial Product on November 4, 2024 and sell it today you would lose (17.00) from holding CB Industrial Product or give up 12.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Industrial Product vs. PIE Industrial Bhd
Performance |
| Timeline |
| CB Industrial Product |
| PIE Industrial Bhd |
CB Industrial and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and PIE Industrial
The main advantage of trading using opposite CB Industrial and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, PIE Industrial 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 PIE Industrial will offset losses from the drop in PIE Industrial's long position.| CB Industrial vs. ECM Libra Financial | CB Industrial vs. Farm Price Holdings | CB Industrial vs. Sports Toto Berhad | CB Industrial vs. Al Aqar Healthcare |
| PIE Industrial vs. Kobay Tech Bhd | PIE Industrial vs. Systech Bhd | PIE Industrial vs. Radiant Globaltech Bhd | PIE Industrial vs. Pantech Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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