Correlation Between Dufu Tech and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both Dufu Tech 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 Dufu Tech and PIE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dufu Tech Corp and PIE Industrial Bhd, you can compare the effects of market volatilities on Dufu Tech 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 Dufu Tech with a short position of PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dufu Tech and PIE Industrial.
Diversification Opportunities for Dufu Tech and PIE Industrial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dufu and PIE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dufu Tech Corp 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 Dufu Tech 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 Dufu Tech Corp 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 Dufu Tech i.e., Dufu Tech and PIE Industrial go up and down completely randomly.
Pair Corralation between Dufu Tech and PIE Industrial
Assuming the 90 days trading horizon Dufu Tech Corp is expected to generate 0.7 times more return on investment than PIE Industrial. However, Dufu Tech Corp is 1.43 times less risky than PIE Industrial. It trades about -0.32 of its potential returns per unit of risk. PIE Industrial Bhd is currently generating about -0.49 per unit of risk. If you would invest 191.00 in Dufu Tech Corp on November 3, 2024 and sell it today you would lose (22.00) from holding Dufu Tech Corp or give up 11.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dufu Tech Corp vs. PIE Industrial Bhd
Performance |
| Timeline |
| Dufu Tech Corp |
| PIE Industrial Bhd |
Dufu Tech and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dufu Tech and PIE Industrial
The main advantage of trading using opposite Dufu Tech and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dufu Tech 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.| Dufu Tech vs. Impiana Hotels Bhd | Dufu Tech vs. Petronas Chemicals Group | Dufu Tech vs. Aurelius Technologies Bhd | Dufu Tech vs. Binasat Communications Bhd |
| PIE Industrial vs. Greatech Technology Bhd | PIE Industrial vs. Uwc Bhd | PIE Industrial vs. Genetec Technology Bhd | PIE Industrial vs. Dufu Tech Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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