Correlation Between ES Ceramics and Press Metal
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Press Metal 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 ES Ceramics and Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Press Metal Bhd, you can compare the effects of market volatilities on ES Ceramics and Press Metal 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 ES Ceramics with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Press Metal.
Diversification Opportunities for ES Ceramics and Press Metal
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 0100 and Press is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal Bhd and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and Press Metal go up and down completely randomly.
Pair Corralation between ES Ceramics and Press Metal
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Press Metal. In addition to that, ES Ceramics is 2.02 times more volatile than Press Metal Bhd. It trades about 0.0 of its total potential returns per unit of risk. Press Metal Bhd is currently generating about 0.01 per unit of volatility. If you would invest 483.00 in Press Metal Bhd on October 18, 2024 and sell it today you would lose (1.00) from holding Press Metal Bhd or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Press Metal Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| Press Metal Bhd |
ES Ceramics and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Press Metal
The main advantage of trading using opposite ES Ceramics and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.| ES Ceramics vs. Bank Islam Malaysia | ES Ceramics vs. Dataprep Holdings Bhd | ES Ceramics vs. Riverview Rubber Estates | ES Ceramics vs. Kluang Rubber |
| Press Metal vs. Homeritz Bhd | Press Metal vs. Computer Forms Bhd | Press Metal vs. ES Ceramics Technology | Press Metal vs. YX Precious Metals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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