Correlation Between Computer Forms and Daya Materials
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Daya Materials 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 Daya Materials 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 Daya Materials Bhd, you can compare the effects of market volatilities on Computer Forms and Daya Materials 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 Daya Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Daya Materials.
Diversification Opportunities for Computer Forms and Daya Materials
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Computer and Daya is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd 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 Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Computer Forms i.e., Computer Forms and Daya Materials go up and down completely randomly.
Pair Corralation between Computer Forms and Daya Materials
Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 1.29 times more return on investment than Daya Materials. However, Computer Forms is 1.29 times more volatile than Daya Materials Bhd. It trades about -0.01 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about -0.02 per unit of risk. If you would invest 19.00 in Computer Forms Bhd on September 4, 2024 and sell it today you would lose (8.00) from holding Computer Forms Bhd or give up 42.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Computer Forms Bhd vs. Daya Materials Bhd
Performance |
| Timeline |
| Computer Forms Bhd |
| Daya Materials Bhd |
Computer Forms and Daya Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Daya Materials
The main advantage of trading using opposite Computer Forms and Daya Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Daya Materials 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 Daya Materials will offset losses from the drop in Daya Materials' long position.| Computer Forms vs. Tex Cycle Technology | Computer Forms vs. Minetech Resources Bhd | Computer Forms vs. Swift Haulage Bhd | Computer Forms vs. Insas Bhd |
| Daya Materials vs. SSF Home Group | Daya Materials vs. Greatech Technology Bhd | Daya Materials vs. Lyc Healthcare Bhd | Daya Materials vs. YTL Hospitality REIT |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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