Correlation Between CB Industrial and Mah Sing
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Mah Sing 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 Mah Sing 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 Mah Sing Group, you can compare the effects of market volatilities on CB Industrial and Mah Sing 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 Mah Sing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Mah Sing.
Diversification Opportunities for CB Industrial and Mah Sing
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 7076 and Mah is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Mah Sing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mah Sing 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 Mah Sing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mah Sing Group has no effect on the direction of CB Industrial i.e., CB Industrial and Mah Sing go up and down completely randomly.
Pair Corralation between CB Industrial and Mah Sing
Assuming the 90 days trading horizon CB Industrial Product is expected to generate 1.02 times more return on investment than Mah Sing. However, CB Industrial is 1.02 times more volatile than Mah Sing Group. It trades about 0.18 of its potential returns per unit of risk. Mah Sing Group is currently generating about -0.08 per unit of risk. If you would invest 128.00 in CB Industrial Product on August 27, 2024 and sell it today you would earn a total of 6.00 from holding CB Industrial Product or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Industrial Product vs. Mah Sing Group
Performance |
| Timeline |
| CB Industrial Product |
| Mah Sing Group |
CB Industrial and Mah Sing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Mah Sing
The main advantage of trading using opposite CB Industrial and Mah Sing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Mah Sing 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 Mah Sing will offset losses from the drop in Mah Sing's long position.The idea behind CB Industrial Product and Mah Sing Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mah Sing vs. Duopharma Biotech Bhd | Mah Sing vs. Press Metal Bhd | Mah Sing vs. Icon Offshore Bhd | Mah Sing vs. Sports Toto Berhad |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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