Correlation Between Rubberex M and Cengild Medical
Can any of the company-specific risk be diversified away by investing in both Rubberex M and Cengild Medical 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 Rubberex M and Cengild Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubberex M and Cengild Medical Berhad, you can compare the effects of market volatilities on Rubberex M and Cengild Medical 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 Rubberex M with a short position of Cengild Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubberex M and Cengild Medical.
Diversification Opportunities for Rubberex M and Cengild Medical
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rubberex and Cengild is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rubberex M and Cengild Medical Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cengild Medical Berhad and Rubberex M 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 Rubberex M are associated (or correlated) with Cengild Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cengild Medical Berhad has no effect on the direction of Rubberex M i.e., Rubberex M and Cengild Medical go up and down completely randomly.
Pair Corralation between Rubberex M and Cengild Medical
Assuming the 90 days trading horizon Rubberex M is expected to under-perform the Cengild Medical. In addition to that, Rubberex M is 1.67 times more volatile than Cengild Medical Berhad. It trades about -0.03 of its total potential returns per unit of risk. Cengild Medical Berhad is currently generating about 0.02 per unit of volatility. If you would invest 27.00 in Cengild Medical Berhad on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Cengild Medical Berhad or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubberex M vs. Cengild Medical Berhad
Performance |
| Timeline |
| Rubberex M |
| Cengild Medical Berhad |
Rubberex M and Cengild Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubberex M and Cengild Medical
The main advantage of trading using opposite Rubberex M and Cengild Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubberex M position performs unexpectedly, Cengild Medical 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 Cengild Medical will offset losses from the drop in Cengild Medical's long position.| Rubberex M vs. Binasat Communications Bhd | Rubberex M vs. Computer Forms Bhd | Rubberex M vs. Choo Bee Metal | Rubberex M vs. Press Metal Bhd |
| Cengild Medical vs. ES Ceramics Technology | Cengild Medical vs. Globetronics Tech Bhd | Cengild Medical vs. MI Technovation Bhd | Cengild Medical 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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