Correlation Between Public Bank and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both Public Bank and MClean Technologies 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 MClean Technologies 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 MClean Technologies Bhd, you can compare the effects of market volatilities on Public Bank and MClean Technologies 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 MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and MClean Technologies.
Diversification Opportunities for Public Bank and MClean Technologies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and MClean is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies 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 MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of Public Bank i.e., Public Bank and MClean Technologies go up and down completely randomly.
Pair Corralation between Public Bank and MClean Technologies
Assuming the 90 days trading horizon Public Bank is expected to generate 10.44 times less return on investment than MClean Technologies. But when comparing it to its historical volatility, Public Bank Bhd is 6.43 times less risky than MClean Technologies. It trades about 0.03 of its potential returns per unit of risk. MClean Technologies Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in MClean Technologies Bhd on October 11, 2024 and sell it today you would earn a total of 14.00 from holding MClean Technologies Bhd or generate 82.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. MClean Technologies Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| MClean Technologies Bhd |
Public Bank and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and MClean Technologies
The main advantage of trading using opposite Public Bank and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, MClean Technologies 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| Public Bank vs. Petronas Chemicals Group | Public Bank vs. Kluang Rubber | Public Bank vs. Alliance Financial Group | Public Bank vs. Homeritz Bhd |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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