Correlation Between CB Industrial and Sapura Industrial
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Sapura 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 Sapura 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 Sapura Industrial Bhd, you can compare the effects of market volatilities on CB Industrial and Sapura 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 Sapura Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Sapura Industrial.
Diversification Opportunities for CB Industrial and Sapura Industrial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between 7076 and Sapura is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Sapura Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapura 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 Sapura Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapura Industrial Bhd has no effect on the direction of CB Industrial i.e., CB Industrial and Sapura Industrial go up and down completely randomly.
Pair Corralation between CB Industrial and Sapura Industrial
Assuming the 90 days trading horizon CB Industrial Product is expected to generate 0.48 times more return on investment than Sapura Industrial. However, CB Industrial Product is 2.08 times less risky than Sapura Industrial. It trades about 0.07 of its potential returns per unit of risk. Sapura Industrial Bhd is currently generating about 0.02 per unit of risk. If you would invest 90.00 in CB Industrial Product on September 1, 2024 and sell it today you would earn a total of 41.00 from holding CB Industrial Product or generate 45.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.81% |
| Values | Daily Returns |
CB Industrial Product vs. Sapura Industrial Bhd
Performance |
| Timeline |
| CB Industrial Product |
| Sapura Industrial Bhd |
CB Industrial and Sapura Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Sapura Industrial
The main advantage of trading using opposite CB Industrial and Sapura Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Sapura 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 Sapura Industrial will offset losses from the drop in Sapura Industrial's long position.| CB Industrial vs. CPE Technology Berhad | CB Industrial vs. Central Industrial Corp | CB Industrial vs. Lotte Chemical Titan | CB Industrial vs. Petronas Chemicals Group |
| Sapura Industrial vs. Digistar Bhd | Sapura Industrial vs. Minetech Resources Bhd | Sapura Industrial vs. Swift Haulage Bhd | Sapura Industrial vs. Bina Darulaman Bhd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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