Correlation Between Computer Forms and Supercomnet Technologies
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Supercomnet Technologies 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 Computer Forms and Supercomnet Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Forms Bhd and Supercomnet Technologies Bhd, you can compare the effects of market volatilities on Computer Forms and Supercomnet Technologies 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 Computer Forms with a short position of Supercomnet Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Supercomnet Technologies.
Diversification Opportunities for Computer Forms and Supercomnet Technologies
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Computer and Supercomnet is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Supercomnet Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercomnet Technologies and Computer Forms 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 Computer Forms Bhd are associated (or correlated) with Supercomnet Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercomnet Technologies has no effect on the direction of Computer Forms i.e., Computer Forms and Supercomnet Technologies go up and down completely randomly.
Pair Corralation between Computer Forms and Supercomnet Technologies
Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 2.31 times more return on investment than Supercomnet Technologies. However, Computer Forms is 2.31 times more volatile than Supercomnet Technologies Bhd. It trades about 0.0 of its potential returns per unit of risk. Supercomnet Technologies Bhd is currently generating about -0.02 per unit of risk. If you would invest 14.00 in Computer Forms Bhd on September 2, 2024 and sell it today you would lose (2.00) from holding Computer Forms Bhd or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. Supercomnet Technologies Bhd
Performance |
| Timeline |
| Computer Forms Bhd |
| Supercomnet Technologies |
Computer Forms and Supercomnet Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Supercomnet Technologies
The main advantage of trading using opposite Computer Forms and Supercomnet Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Supercomnet Technologies 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 Supercomnet Technologies will offset losses from the drop in Supercomnet Technologies' long position.| Computer Forms vs. Star Media Group | Computer Forms vs. Icon Offshore Bhd | Computer Forms vs. Lotte Chemical Titan | Computer Forms vs. CB Industrial Product |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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