Correlation Between CB Industrial and Dufu Tech
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Dufu Tech 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 Dufu Tech 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 Dufu Tech Corp, you can compare the effects of market volatilities on CB Industrial and Dufu Tech 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 Dufu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Dufu Tech.
Diversification Opportunities for CB Industrial and Dufu Tech
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 7076 and Dufu is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Dufu Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dufu Tech Corp 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 Dufu Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dufu Tech Corp has no effect on the direction of CB Industrial i.e., CB Industrial and Dufu Tech go up and down completely randomly.
Pair Corralation between CB Industrial and Dufu Tech
Assuming the 90 days trading horizon CB Industrial Product is expected to generate 0.58 times more return on investment than Dufu Tech. However, CB Industrial Product is 1.72 times less risky than Dufu Tech. It trades about 0.14 of its potential returns per unit of risk. Dufu Tech Corp is currently generating about -0.07 per unit of risk. If you would invest 128.00 in CB Industrial Product on August 24, 2024 and sell it today you would earn a total of 5.00 from holding CB Industrial Product or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Industrial Product vs. Dufu Tech Corp
Performance |
| Timeline |
| CB Industrial Product |
| Dufu Tech Corp |
CB Industrial and Dufu Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Dufu Tech
The main advantage of trading using opposite CB Industrial and Dufu Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Dufu Tech 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 Dufu Tech will offset losses from the drop in Dufu Tech's long position.| CB Industrial vs. Greatech Technology Bhd | CB Industrial vs. Uwc Bhd | CB Industrial vs. Genetec Technology Bhd | CB Industrial vs. PIE Industrial Bhd |
| Dufu Tech vs. Apollo Food Holdings | Dufu Tech vs. IHH Healthcare Bhd | Dufu Tech vs. YTL Hospitality REIT | Dufu Tech vs. Petronas Chemicals Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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