Correlation Between CPE Technology and MyTech Group

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

Diversification Opportunities for CPE Technology and MyTech Group

0.48

Correlation Coefficient

CPE Technology  MyTech Group

Very weak diversification

The 3 months correlation between CPE and MyTech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CPE 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 CPE 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 CPE 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 CPE Technology i.e., CPE Technology and MyTech Group go up and down completely randomly.

Pair Corralation between CPE Technology and MyTech Group

Assuming the 90 days trading horizon CPE Technology Berhad is expected to under-perform the MyTech Group. But the stock apears to be less risky and, when comparing its historical volatility, CPE Technology Berhad is 1.61 times less risky than MyTech Group. The stock trades about -0.15 of its potential returns per unit of risk. The MyTech Group Bhd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  39.00  in MyTech Group Bhd on December 24, 2024 and sell it today you would lose (2.00) from holding MyTech Group Bhd or give up 5.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

CPE Technology Berhad  vs.  MyTech Group Bhd

CPE Technology Berhad

Risk-Adjusted Performance

Very Weak

Over the last 90 days CPE Technology Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

MyTech Group Bhd

Risk-Adjusted Performance

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.

Pair Trading with CPE Technology and MyTech Group

The main advantage of trading using opposite CPE Technology and MyTech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPE 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 CPE 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.