Correlation Between Computer Forms and Oriental Food
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Oriental Food 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 Oriental Food 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 Oriental Food Industries, you can compare the effects of market volatilities on Computer Forms and Oriental Food 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 Oriental Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Oriental Food.
Diversification Opportunities for Computer Forms and Oriental Food
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Computer and Oriental is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries 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 Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of Computer Forms i.e., Computer Forms and Oriental Food go up and down completely randomly.
Pair Corralation between Computer Forms and Oriental Food
Assuming the 90 days trading horizon Computer Forms Bhd is expected to under-perform the Oriental Food. In addition to that, Computer Forms is 2.29 times more volatile than Oriental Food Industries. It trades about -0.09 of its total potential returns per unit of risk. Oriental Food Industries is currently generating about 0.04 per unit of volatility. If you would invest 118.00 in Oriental Food Industries on August 28, 2024 and sell it today you would earn a total of 51.00 from holding Oriental Food Industries or generate 43.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.41% |
| Values | Daily Returns |
Computer Forms Bhd vs. Oriental Food Industries
Performance |
| Timeline |
| Computer Forms Bhd |
| Oriental Food Industries |
Computer Forms and Oriental Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Oriental Food
The main advantage of trading using opposite Computer Forms and Oriental Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Oriental Food 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 Oriental Food will offset losses from the drop in Oriental Food'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 |
| Oriental Food vs. Shangri La Hotels | Oriental Food vs. Apex Healthcare Bhd | Oriental Food vs. Aeon Credit Service | Oriental Food vs. Impiana Hotels 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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