Correlation Between Press Metal and CPE Technology
Can any of the company-specific risk be diversified away by investing in both Press Metal and CPE Technology 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 Press Metal and CPE Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Press Metal Bhd and CPE Technology Berhad, you can compare the effects of market volatilities on Press Metal and CPE Technology 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 Press Metal with a short position of CPE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and CPE Technology.
Diversification Opportunities for Press Metal and CPE Technology
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Press and CPE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and CPE Technology Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPE Technology Berhad and Press Metal 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 Press Metal Bhd are associated (or correlated) with CPE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPE Technology Berhad has no effect on the direction of Press Metal i.e., Press Metal and CPE Technology go up and down completely randomly.
Pair Corralation between Press Metal and CPE Technology
Assuming the 90 days trading horizon Press Metal is expected to generate 1.97 times less return on investment than CPE Technology. But when comparing it to its historical volatility, Press Metal Bhd is 1.75 times less risky than CPE Technology. It trades about 0.01 of its potential returns per unit of risk. CPE Technology Berhad is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 91.00 in CPE Technology Berhad on September 2, 2024 and sell it today you would lose (1.00) from holding CPE Technology Berhad or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.39% |
| Values | Daily Returns |
Press Metal Bhd vs. CPE Technology Berhad
Performance |
| Timeline |
| Press Metal Bhd |
| CPE Technology Berhad |
Press Metal and CPE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and CPE Technology
The main advantage of trading using opposite Press Metal and CPE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, CPE Technology 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 CPE Technology will offset losses from the drop in CPE Technology's long position.| Press Metal vs. Greatech Technology Bhd | Press Metal vs. Pantech Group Holdings | Press Metal vs. PMB Technology Bhd | Press Metal vs. Cloudpoint Technology Berhad |
| CPE Technology vs. Malayan Banking Bhd | CPE Technology vs. Public Bank Bhd | CPE Technology vs. Petronas Chemicals Group | CPE Technology vs. Tenaga Nasional 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |