Correlation Between CB Industrial and Supercomnet Technologies

Can any of the company-specific risk be diversified away by investing in both CB Industrial and Supercomnet Technologies 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 CB Industrial and Supercomnet Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CB Industrial Product and Supercomnet Technologies Bhd, you can compare the effects of market volatilities on CB Industrial and Supercomnet Technologies 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 CB Industrial with a short position of Supercomnet Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Supercomnet Technologies.

Diversification Opportunities for CB Industrial and Supercomnet Technologies

-0.41

Correlation Coefficient

CB Industrial  Supercomnet Technologies

Very good diversification

The 3 months correlation between 7076 and Supercomnet is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Supercomnet Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercomnet Technologies and CB 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 CB Industrial Product are associated (or correlated) with Supercomnet Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercomnet Technologies has no effect on the direction of CB Industrial i.e., CB Industrial and Supercomnet Technologies go up and down completely randomly.

Pair Corralation between CB Industrial and Supercomnet Technologies

Assuming the 90 days trading horizon CB Industrial Product is expected to generate 0.86 times more return on investment than Supercomnet Technologies. However, CB Industrial Product is 1.16 times less risky than Supercomnet Technologies. It trades about 0.01 of its potential returns per unit of risk. Supercomnet Technologies Bhd is currently generating about 0.0 per unit of risk. If you would invest  136.00  in CB Industrial Product on September 14, 2024 and sell it today you would earn a total of  0.00  from holding CB Industrial Product or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

CB Industrial Product  vs.  Supercomnet Technologies Bhd

CB Industrial Product

Risk-Adjusted Performance

0 of 100

Very Weak

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

Supercomnet Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CB Industrial and Supercomnet Technologies

The main advantage of trading using opposite CB Industrial and Supercomnet Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Supercomnet Technologies 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 Supercomnet Technologies will offset losses from the drop in Supercomnet Technologies' long position.

The idea behind CB Industrial Product and Supercomnet Technologies 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.