Correlation Between Central Industrial and Protasco Bhd
Can any of the company-specific risk be diversified away by investing in both Central Industrial and Protasco Bhd 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 Central Industrial and Protasco Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Industrial Corp and Protasco Bhd, you can compare the effects of market volatilities on Central Industrial and Protasco Bhd 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 Central Industrial with a short position of Protasco Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Industrial and Protasco Bhd.
Diversification Opportunities for Central Industrial and Protasco Bhd
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Protasco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Central Industrial Corp and Protasco Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protasco Bhd and Central Industrial 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 Central Industrial Corp are associated (or correlated) with Protasco Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protasco Bhd has no effect on the direction of Central Industrial i.e., Central Industrial and Protasco Bhd go up and down completely randomly.
Pair Corralation between Central Industrial and Protasco Bhd
Assuming the 90 days trading horizon Central Industrial Corp is expected to generate 0.42 times more return on investment than Protasco Bhd. However, Central Industrial Corp is 2.37 times less risky than Protasco Bhd. It trades about 0.05 of its potential returns per unit of risk. Protasco Bhd is currently generating about 0.01 per unit of risk. If you would invest 86.00 in Central Industrial Corp on October 20, 2024 and sell it today you would earn a total of 1.00 from holding Central Industrial Corp or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Industrial Corp vs. Protasco Bhd
Performance |
| Timeline |
| Central Industrial Corp |
| Protasco Bhd |
Central Industrial and Protasco Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Industrial and Protasco Bhd
The main advantage of trading using opposite Central Industrial and Protasco Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Industrial position performs unexpectedly, Protasco Bhd 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 Protasco Bhd will offset losses from the drop in Protasco Bhd's long position.| Central Industrial vs. SFP Tech Holdings | Central Industrial vs. PESTECH International Bhd | Central Industrial vs. Al Aqar Healthcare | Central Industrial vs. Cosmos Technology International |
| Protasco Bhd vs. Sapura Industrial Bhd | Protasco Bhd vs. Sungei Bagan Rubber | Protasco Bhd vs. Mercury Industries Bhd | Protasco Bhd vs. Al Aqar Healthcare |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |