Correlation Between Computer Forms and Eonmetall Group
Can any of the company-specific risk be diversified away by investing in both Computer Forms and Eonmetall Group 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 Eonmetall Group 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 Eonmetall Group Bhd, you can compare the effects of market volatilities on Computer Forms and Eonmetall Group 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 Eonmetall Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Eonmetall Group.
Diversification Opportunities for Computer Forms and Eonmetall Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Computer and Eonmetall is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Eonmetall Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eonmetall Group 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 Eonmetall Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eonmetall Group Bhd has no effect on the direction of Computer Forms i.e., Computer Forms and Eonmetall Group go up and down completely randomly.
Pair Corralation between Computer Forms and Eonmetall Group
Assuming the 90 days trading horizon Computer Forms Bhd is expected to under-perform the Eonmetall Group. In addition to that, Computer Forms is 1.24 times more volatile than Eonmetall Group Bhd. It trades about -0.19 of its total potential returns per unit of risk. Eonmetall Group Bhd is currently generating about 0.02 per unit of volatility. If you would invest 30.00 in Eonmetall Group Bhd on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Eonmetall Group 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. Eonmetall Group Bhd
Performance |
| Timeline |
| Computer Forms Bhd |
| Eonmetall Group Bhd |
Computer Forms and Eonmetall Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Forms and Eonmetall Group
The main advantage of trading using opposite Computer Forms and Eonmetall Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Forms position performs unexpectedly, Eonmetall Group 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 Eonmetall Group will offset losses from the drop in Eonmetall Group'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 |
| Eonmetall Group vs. YX Precious Metals | Eonmetall Group vs. Senheng New Retail | Eonmetall Group vs. Farm Price Holdings | Eonmetall Group vs. Dataprep Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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