Correlation Between Computer Forms and Rubberex M

Can any of the company-specific risk be diversified away by investing in both Computer Forms and Rubberex M 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 Computer Forms and Rubberex M into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Computer Forms Bhd and Rubberex M, you can compare the effects of market volatilities on Computer Forms and Rubberex M 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 Computer Forms with a short position of Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Forms and Rubberex M.

Diversification Opportunities for Computer Forms and Rubberex M

0.13

Correlation Coefficient

Computer Forms  Rubberex M

Average diversification

The 3 months correlation between Computer and Rubberex is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Computer Forms Bhd and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M and Computer Forms 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 Computer Forms Bhd are associated (or correlated) with Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Computer Forms i.e., Computer Forms and Rubberex M go up and down completely randomly.

Pair Corralation between Computer Forms and Rubberex M

Assuming the 90 days trading horizon Computer Forms Bhd is expected to generate 1.03 times more return on investment than Rubberex M. However, Computer Forms is 1.03 times more volatile than Rubberex M. It trades about 0.02 of its potential returns per unit of risk. Rubberex M is currently generating about -0.03 per unit of risk. If you would invest  12.00  in Computer Forms Bhd on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Computer Forms Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Computer Forms Bhd  vs.  Rubberex M

Computer Forms Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Forms Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Computer Forms is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Rubberex M

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubberex M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Rubberex M 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 Computer Forms and Rubberex M

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

The idea behind Computer Forms Bhd and Rubberex M 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.