Correlation Between YX Precious and Press Metal
Can any of the company-specific risk be diversified away by investing in both YX Precious 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 YX Precious and Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YX Precious Metals and Press Metal Bhd, you can compare the effects of market volatilities on YX Precious 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 YX Precious with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of YX Precious and Press Metal.
Diversification Opportunities for YX Precious and Press Metal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0250 and Press is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals 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 YX Precious 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 YX Precious Metals 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 YX Precious i.e., YX Precious and Press Metal go up and down completely randomly.
Pair Corralation between YX Precious and Press Metal
Assuming the 90 days trading horizon YX Precious Metals is expected to under-perform the Press Metal. But the stock apears to be less risky and, when comparing its historical volatility, YX Precious Metals is 1.03 times less risky than Press Metal. The stock trades about 0.0 of its potential returns per unit of risk. The Press Metal Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 463.00 in Press Metal Bhd on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Press Metal Bhd or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YX Precious Metals vs. Press Metal Bhd
Performance |
| Timeline |
| YX Precious Metals |
| Press Metal Bhd |
YX Precious and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YX Precious and Press Metal
The main advantage of trading using opposite YX Precious and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YX Precious 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.| YX Precious vs. Malayan Banking Bhd | YX Precious vs. Public Bank Bhd | YX Precious vs. Petronas Chemicals Group | YX Precious vs. Tenaga Nasional Bhd |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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