Correlation Between Computer Forms and Diversified Gateway
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Diversified Gateway 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 Diversified Gateway 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 Diversified Gateway Solutions, you can compare the effects of market volatilities on Computer Forms and Diversified Gateway 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 Diversified Gateway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Diversified Gateway.
Diversification Opportunities for Computer Forms and Diversified Gateway
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Computer and Diversified is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Diversified Gateway Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Gateway 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 Diversified Gateway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Gateway has no effect on the direction of Computer Forms i.e., Computer Forms and Diversified Gateway go up and down completely randomly.
Pair Corralation between Computer Forms and Diversified Gateway
Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 0.72 times more return on investment than Diversified Gateway. However, Computer Forms Bhd is 1.4 times less risky than Diversified Gateway. It trades about 0.01 of its potential returns per unit of risk. Diversified Gateway Solutions is currently generating about -0.08 per unit of risk. If you would invest 12.00 in Computer Forms Bhd on September 3, 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. Diversified Gateway Solutions
Performance |
| Timeline |
| Computer Forms Bhd |
| Diversified Gateway |
Computer Forms and Diversified Gateway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Diversified Gateway
The main advantage of trading using opposite Computer Forms and Diversified Gateway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Diversified Gateway 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 Diversified Gateway will offset losses from the drop in Diversified Gateway's 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 |
| Diversified Gateway vs. Dagang Nexchange Bhd | Diversified Gateway vs. Datasonic Group Bhd | Diversified Gateway vs. Awanbiru Technology Bhd | Diversified Gateway vs. Dataprep Holdings Bhd |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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