Correlation Between Computer Forms and Eversafe Rubber
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Eversafe Rubber 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 Eversafe Rubber 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 Eversafe Rubber Bhd, you can compare the effects of market volatilities on Computer Forms and Eversafe Rubber 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 Eversafe Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Eversafe Rubber.
Diversification Opportunities for Computer Forms and Eversafe Rubber
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Computer and Eversafe is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Eversafe Rubber Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversafe Rubber 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 Eversafe Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversafe Rubber Bhd has no effect on the direction of Computer Forms i.e., Computer Forms and Eversafe Rubber go up and down completely randomly.
Pair Corralation between Computer Forms and Eversafe Rubber
Assuming the 90 days trading horizon Computer Forms Bhd is expected to under-perform the Eversafe Rubber. In addition to that, Computer Forms is 1.3 times more volatile than Eversafe Rubber Bhd. It trades about -0.22 of its total potential returns per unit of risk. Eversafe Rubber Bhd is currently generating about 0.02 per unit of volatility. If you would invest 15.00 in Eversafe Rubber Bhd on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Eversafe Rubber Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. Eversafe Rubber Bhd
Performance |
| Timeline |
| Computer Forms Bhd |
| Eversafe Rubber Bhd |
Computer Forms and Eversafe Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Eversafe Rubber
The main advantage of trading using opposite Computer Forms and Eversafe Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Eversafe Rubber 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 Eversafe Rubber will offset losses from the drop in Eversafe Rubber's long position.| Computer Forms vs. IHH Healthcare Bhd | Computer Forms vs. Impiana Hotels Bhd | Computer Forms vs. DC HEALTHCARE HOLDINGS | Computer Forms vs. Sports Toto Berhad |
| Eversafe Rubber vs. Sapura Industrial Bhd | Eversafe Rubber vs. Genetec Technology Bhd | Eversafe Rubber vs. Uwc Bhd | Eversafe Rubber vs. JAKS Resources 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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