Correlation Between Computer Forms and Advance Information
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Advance Information 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 Advance Information 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 Advance Information Marketing, you can compare the effects of market volatilities on Computer Forms and Advance Information 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 Advance Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Advance Information.
Diversification Opportunities for Computer Forms and Advance Information
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Computer and Advance is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Advance Information Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Information 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 Advance Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Information has no effect on the direction of Computer Forms i.e., Computer Forms and Advance Information go up and down completely randomly.
Pair Corralation between Computer Forms and Advance Information
Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 0.65 times more return on investment than Advance Information. However, Computer Forms Bhd is 1.53 times less risky than Advance Information. It trades about 0.02 of its potential returns per unit of risk. Advance Information Marketing is currently generating about 0.01 per unit of risk. If you would invest 12.00 in Computer Forms Bhd on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Computer Forms Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. Advance Information Marketing
Performance |
| Timeline |
| Computer Forms Bhd |
| Advance Information |
Computer Forms and Advance Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Advance Information
The main advantage of trading using opposite Computer Forms and Advance Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Advance Information 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 Advance Information will offset losses from the drop in Advance Information's long position.| Computer Forms vs. ES Ceramics Technology | Computer Forms vs. Uchi Technologies Bhd | Computer Forms vs. Globetronics Tech Bhd | Computer Forms vs. Shangri La Hotels |
| Advance Information vs. Magni Tech Industries | Advance Information vs. Dufu Tech Corp | Advance Information vs. IHH Healthcare Bhd | Advance Information vs. SFP Tech Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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