Correlation Between Computer Forms and Shangri La
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Shangri La 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 Shangri La 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 Shangri La Hotels, you can compare the effects of market volatilities on Computer Forms and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Shangri La.
Diversification Opportunities for Computer Forms and Shangri La
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Computer and Shangri is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Computer Forms i.e., Computer Forms and Shangri La go up and down completely randomly.
Pair Corralation between Computer Forms and Shangri La
Assuming the 90 days trading horizon Computer Forms Bhd is expected to under-perform the Shangri La. In addition to that, Computer Forms is 3.06 times more volatile than Shangri La Hotels. It trades about -0.09 of its total potential returns per unit of risk. Shangri La Hotels is currently generating about -0.05 per unit of volatility. If you would invest 330.00 in Shangri La Hotels on September 16, 2024 and sell it today you would lose (130.00) from holding Shangri La Hotels or give up 39.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. Shangri La Hotels
Performance |
| Timeline |
| Computer Forms Bhd |
| Shangri La Hotels |
Computer Forms and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Shangri La
The main advantage of trading using opposite Computer Forms and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La'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 |
| Shangri La vs. Sports Toto Berhad | Shangri La vs. CSC Steel Holdings | Shangri La vs. Cosmos Technology International | Shangri La vs. Dufu Tech Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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