Correlation Between Cloudpoint Technology and MyTech Group

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Can any of the company-specific risk be diversified away by investing in both Cloudpoint Technology and MyTech 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 Cloudpoint Technology and MyTech Group 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 MyTech Group Bhd, you can compare the effects of market volatilities on Cloudpoint Technology and MyTech 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 Cloudpoint Technology with a short position of MyTech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudpoint Technology and MyTech Group.

Diversification Opportunities for Cloudpoint Technology and MyTech Group

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cloudpoint and MyTech is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cloudpoint Technology Berhad and MyTech Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyTech Group 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 MyTech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyTech Group Bhd has no effect on the direction of Cloudpoint Technology i.e., Cloudpoint Technology and MyTech Group go up and down completely randomly.

Pair Corralation between Cloudpoint Technology and MyTech Group

Assuming the 90 days trading horizon Cloudpoint Technology Berhad is expected to generate 0.74 times more return on investment than MyTech Group. However, Cloudpoint Technology Berhad is 1.36 times less risky than MyTech Group. It trades about 0.14 of its potential returns per unit of risk. MyTech Group Bhd is currently generating about -0.01 per unit of risk. If you would invest  75.00  in Cloudpoint Technology Berhad on September 23, 2024 and sell it today you would earn a total of  18.00  from holding Cloudpoint Technology Berhad or generate 24.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Cloudpoint Technology Berhad  vs.  MyTech Group Bhd

 Performance 
       Timeline  
Cloudpoint Technology 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cloudpoint Technology Berhad are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Cloudpoint Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.
MyTech Group Bhd 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MyTech Group Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MyTech Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Cloudpoint Technology and MyTech Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cloudpoint Technology and MyTech Group

The main advantage of trading using opposite Cloudpoint Technology and MyTech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudpoint Technology position performs unexpectedly, MyTech 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 MyTech Group will offset losses from the drop in MyTech Group's long position.
The idea behind Cloudpoint Technology Berhad and MyTech Group Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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