Correlation Between Cengild Medical and MClean Technologies

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

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

Diversification Opportunities for Cengild Medical and MClean Technologies

0.18

Correlation Coefficient

Cengild Medical  MClean Technologies

Average diversification

The 3 months correlation between Cengild and MClean is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and Cengild Medical 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 Cengild Medical Berhad are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of Cengild Medical i.e., Cengild Medical and MClean Technologies go up and down completely randomly.

Pair Corralation between Cengild Medical and MClean Technologies

Assuming the 90 days trading horizon Cengild Medical Berhad is expected to under-perform the MClean Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Cengild Medical Berhad is 3.29 times less risky than MClean Technologies. The stock trades about -0.03 of its potential returns per unit of risk. The MClean Technologies Bhd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17.00  in MClean Technologies Bhd on September 4, 2024 and sell it today you would earn a total of  10.00  from holding MClean Technologies Bhd or generate 58.82% return on investment over 90 days.

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

Cengild Medical Berhad  vs.  MClean Technologies Bhd

Cengild Medical Berhad

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cengild Medical Berhad are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cengild Medical is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

MClean Technologies Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MClean Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, MClean 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 Cengild Medical and MClean Technologies

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

The idea behind Cengild Medical Berhad and MClean 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .