Correlation Between Public Bank and OpenSys M
Can any of the company-specific risk be diversified away by investing in both Public Bank and OpenSys M 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 Public Bank and OpenSys M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Bank Bhd and OpenSys M Bhd, you can compare the effects of market volatilities on Public Bank and OpenSys M 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 Public Bank with a short position of OpenSys M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and OpenSys M.
Diversification Opportunities for Public Bank and OpenSys M
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Public and OpenSys is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and OpenSys M Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OpenSys M Bhd and Public Bank 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 Public Bank Bhd are associated (or correlated) with OpenSys M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OpenSys M Bhd has no effect on the direction of Public Bank i.e., Public Bank and OpenSys M go up and down completely randomly.
Pair Corralation between Public Bank and OpenSys M
Assuming the 90 days trading horizon Public Bank Bhd is expected to generate 0.51 times more return on investment than OpenSys M. However, Public Bank Bhd is 1.96 times less risky than OpenSys M. It trades about -0.02 of its potential returns per unit of risk. OpenSys M Bhd is currently generating about -0.07 per unit of risk. If you would invest 446.00 in Public Bank Bhd on August 30, 2024 and sell it today you would lose (2.00) from holding Public Bank Bhd or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Public Bank Bhd vs. OpenSys M Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| OpenSys M Bhd |
Public Bank and OpenSys M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and OpenSys M
The main advantage of trading using opposite Public Bank and OpenSys M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, OpenSys M 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 OpenSys M will offset losses from the drop in OpenSys M's long position.| Public Bank vs. Apollo Food Holdings | Public Bank vs. Mycron Steel Bhd | Public Bank vs. Malaysia Steel Works | Public Bank vs. Binasat Communications Bhd |
| OpenSys M vs. Malayan Banking Bhd | OpenSys M vs. Public Bank Bhd | OpenSys M vs. Petronas Chemicals Group | OpenSys M vs. IHH Healthcare 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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