Correlation Between Computer Forms and Kluang Rubber
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Kluang 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 Kluang 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 Kluang Rubber, you can compare the effects of market volatilities on Computer Forms and Kluang 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 Kluang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Kluang Rubber.
Diversification Opportunities for Computer Forms and Kluang Rubber
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Computer and Kluang is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Kluang Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kluang Rubber 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 Kluang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kluang Rubber has no effect on the direction of Computer Forms i.e., Computer Forms and Kluang Rubber go up and down completely randomly.
Pair Corralation between Computer Forms and Kluang Rubber
Assuming the 90 days trading horizon Computer Forms Bhd is expected to under-perform the Kluang Rubber. In addition to that, Computer Forms is 10.14 times more volatile than Kluang Rubber. It trades about -0.16 of its total potential returns per unit of risk. Kluang Rubber is currently generating about 0.13 per unit of volatility. If you would invest 561.00 in Kluang Rubber on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Kluang Rubber or generate 1.25% 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. Kluang Rubber
Performance |
| Timeline |
| Computer Forms Bhd |
| Kluang Rubber |
Computer Forms and Kluang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Kluang Rubber
The main advantage of trading using opposite Computer Forms and Kluang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Kluang 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 Kluang Rubber will offset losses from the drop in Kluang Rubber's long position.| Computer Forms vs. EA Technique M | Computer Forms vs. MClean Technologies Bhd | Computer Forms vs. SFP Tech Holdings | Computer Forms vs. CPE Technology Berhad |
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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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