Correlation Between Computer Forms and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both Computer Forms and PIE Industrial 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 PIE Industrial 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 PIE Industrial Bhd, you can compare the effects of market volatilities on Computer Forms and PIE Industrial 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 PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and PIE Industrial.
Diversification Opportunities for Computer Forms and PIE Industrial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Computer and PIE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial Bhd 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 PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of Computer Forms i.e., Computer Forms and PIE Industrial go up and down completely randomly.
Pair Corralation between Computer Forms and PIE Industrial
Assuming the 90 days trading horizon Computer Forms Bhd is expected to under-perform the PIE Industrial. In addition to that, Computer Forms is 1.94 times more volatile than PIE Industrial Bhd. It trades about -0.05 of its total potential returns per unit of risk. PIE Industrial Bhd is currently generating about -0.07 per unit of volatility. If you would invest 540.00 in PIE Industrial Bhd on November 2, 2024 and sell it today you would lose (83.00) from holding PIE Industrial Bhd or give up 15.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Forms Bhd vs. PIE Industrial Bhd
Performance |
| Timeline |
| Computer Forms Bhd |
| PIE Industrial Bhd |
Computer Forms and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and PIE Industrial
The main advantage of trading using opposite Computer Forms and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, PIE Industrial 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 PIE Industrial will offset losses from the drop in PIE Industrial's long position.| Computer Forms vs. PMB Technology Bhd | Computer Forms vs. Binasat Communications Bhd | Computer Forms vs. YX Precious Metals | Computer Forms vs. Dataprep Holdings Bhd |
| PIE Industrial vs. Senheng New Retail | PIE Industrial vs. ES Ceramics Technology | PIE Industrial vs. Choo Bee Metal | PIE Industrial vs. Central Industrial 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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