Correlation Between Digistar Bhd and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and PMB Technology 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 Digistar Bhd and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and PMB Technology Bhd, you can compare the effects of market volatilities on Digistar Bhd and PMB Technology 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 Digistar Bhd with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and PMB Technology.
Diversification Opportunities for Digistar Bhd and PMB Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Digistar and PMB is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology Bhd and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and PMB Technology go up and down completely randomly.
Pair Corralation between Digistar Bhd and PMB Technology
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 2.11 times more return on investment than PMB Technology. However, Digistar Bhd is 2.11 times more volatile than PMB Technology Bhd. It trades about 0.0 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.03 per unit of risk. If you would invest 7.00 in Digistar Bhd on September 12, 2024 and sell it today you would lose (2.00) from holding Digistar Bhd or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Digistar Bhd vs. PMB Technology Bhd
Performance |
| Timeline |
| Digistar Bhd |
| PMB Technology Bhd |
Digistar Bhd and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and PMB Technology
The main advantage of trading using opposite Digistar Bhd and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, PMB Technology 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 PMB Technology will offset losses from the drop in PMB Technology's long position.| Digistar Bhd vs. Malayan Banking Bhd | Digistar Bhd vs. Public Bank Bhd | Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Tenaga Nasional Bhd |
| PMB Technology vs. Press Metal Bhd | PMB Technology vs. Pantech Group Holdings | PMB Technology vs. CSC Steel Holdings | PMB Technology vs. Coraza Integrated Technology |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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