Correlation Between Cloudpoint Technology and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and PMB 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 Cloudpoint Technology and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloudpoint Technology Berhad and PMB Technology Bhd, you can compare the effects of market volatilities on Cloudpoint Technology and PMB 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 Cloudpoint Technology with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and PMB Technology.
Diversification Opportunities for Cloudpoint Technology and PMB Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cloudpoint and PMB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology Bhd and Cloudpoint Technology 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 Cloudpoint Technology Berhad are associated (or correlated) with PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and PMB Technology go up and down completely randomly.
Pair Corralation between Cloudpoint Technology and PMB Technology
Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 0.58 times more return on investment than PMB Technology. However, Cloudpoint Technology Berhad is 1.72 times less risky than PMB Technology. It trades about 0.25 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about 0.12 per unit of risk. If you would invest 83.00 in Cloudpoint Technology Berhad on September 16, 2024 and sell it today you would earn a total of 9.00 from holding Cloudpoint Technology Berhad or generate 10.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cloudpoint Technology Berhad vs. PMB Technology Bhd
Performance |
Timeline |
Cloudpoint Technology |
PMB Technology Bhd |
Cloudpoint Technology and PMB Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cloudpoint Technology and PMB Technology
The main advantage of trading using opposite Cloudpoint Technology and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, PMB 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 PMB Technology will offset losses from the drop in PMB Technology's long position.Cloudpoint Technology vs. Malayan Banking Bhd | Cloudpoint Technology vs. Public Bank Bhd | Cloudpoint Technology vs. Petronas Chemicals Group | Cloudpoint Technology vs. Tenaga Nasional Bhd |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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