Correlation Between Computer Forms and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Malaysia Steel 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 Malaysia Steel 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 Malaysia Steel Works, you can compare the effects of market volatilities on Computer Forms and Malaysia Steel 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 Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Malaysia Steel.
Diversification Opportunities for Computer Forms and Malaysia Steel
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Computer and Malaysia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works 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 Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of Computer Forms i.e., Computer Forms and Malaysia Steel go up and down completely randomly.
Pair Corralation between Computer Forms and Malaysia Steel
Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 2.75 times more return on investment than Malaysia Steel. However, Computer Forms is 2.75 times more volatile than Malaysia Steel Works. It trades about 0.01 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about 0.0 per unit of risk. If you would invest 12.00 in Computer Forms Bhd on August 27, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. Malaysia Steel Works
Performance |
| Timeline |
| Computer Forms Bhd |
| Malaysia Steel Works |
Computer Forms and Malaysia Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Malaysia Steel
The main advantage of trading using opposite Computer Forms and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Malaysia Steel 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 Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.| Computer Forms vs. Digistar Bhd | Computer Forms vs. Minetech Resources Bhd | Computer Forms vs. OpenSys M Bhd | Computer Forms vs. Insas Bhd |
| Malaysia Steel vs. Mercury Industries Bhd | Malaysia Steel vs. PMB Technology Bhd | Malaysia Steel vs. Mycron Steel Bhd | Malaysia Steel vs. Choo Bee Metal |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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