Correlation Between Computer Forms and Asian Pac
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Asian Pac 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 Asian Pac 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 Asian Pac Holdings, you can compare the effects of market volatilities on Computer Forms and Asian Pac 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 Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Asian Pac.
Diversification Opportunities for Computer Forms and Asian Pac
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Computer and Asian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings 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 Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Computer Forms i.e., Computer Forms and Asian Pac go up and down completely randomly.
Pair Corralation between Computer Forms and Asian Pac
Assuming the 90 days trading horizon Computer Forms is expected to generate 3.86 times less return on investment than Asian Pac. In addition to that, Computer Forms is 1.46 times more volatile than Asian Pac Holdings. It trades about 0.02 of its total potential returns per unit of risk. Asian Pac Holdings is currently generating about 0.1 per unit of volatility. If you would invest 9.50 in Asian Pac Holdings on September 15, 2024 and sell it today you would earn a total of 0.50 from holding Asian Pac Holdings or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. Asian Pac Holdings
Performance |
| Timeline |
| Computer Forms Bhd |
| Asian Pac Holdings |
Computer Forms and Asian Pac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Asian Pac
The main advantage of trading using opposite Computer Forms and Asian Pac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Asian Pac 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 Asian Pac will offset losses from the drop in Asian Pac's long position.| Computer Forms vs. Tex Cycle Technology | Computer Forms vs. MClean Technologies Bhd | Computer Forms vs. Al Aqar Healthcare | Computer Forms vs. PMB Technology Bhd |
| Asian Pac vs. Kawan Food Bhd | Asian Pac vs. Oriental Food Industries | Asian Pac vs. Computer Forms Bhd | Asian Pac vs. Malayan Banking 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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