Correlation Between Computer Forms and EA Technique
Can any of the company-specific risk be diversified away by investing in both Computer Forms and EA Technique 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 EA Technique 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 EA Technique M, you can compare the effects of market volatilities on Computer Forms and EA Technique 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 EA Technique. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and EA Technique.
Diversification Opportunities for Computer Forms and EA Technique
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Computer and 5259 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M 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 EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Computer Forms i.e., Computer Forms and EA Technique go up and down completely randomly.
Pair Corralation between Computer Forms and EA Technique
Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 2.57 times more return on investment than EA Technique. However, Computer Forms is 2.57 times more volatile than EA Technique M. It trades about 0.01 of its potential returns per unit of risk. EA Technique M is currently generating about 0.0 per unit of risk. If you would invest 12.00 in Computer Forms Bhd on September 2, 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. EA Technique M
Performance |
| Timeline |
| Computer Forms Bhd |
| EA Technique M |
Computer Forms and EA Technique Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and EA Technique
The main advantage of trading using opposite Computer Forms and EA Technique positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, EA Technique 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 EA Technique will offset losses from the drop in EA Technique's long position.| Computer Forms vs. Star Media Group | Computer Forms vs. Icon Offshore Bhd | Computer Forms vs. Lotte Chemical Titan | Computer Forms vs. CB Industrial Product |
| EA Technique vs. Binasat Communications Bhd | EA Technique vs. CPE Technology Berhad | EA Technique vs. Uchi Technologies Bhd | EA Technique vs. Aurelius Technologies 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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