Correlation Between Public Bank and Deleum Bhd
Can any of the company-specific risk be diversified away by investing in both Public Bank and Deleum Bhd 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 Deleum Bhd 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 Deleum Bhd, you can compare the effects of market volatilities on Public Bank and Deleum Bhd 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 Deleum Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Deleum Bhd.
Diversification Opportunities for Public Bank and Deleum Bhd
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and Deleum is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Deleum Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deleum 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 Deleum Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deleum Bhd has no effect on the direction of Public Bank i.e., Public Bank and Deleum Bhd go up and down completely randomly.
Pair Corralation between Public Bank and Deleum Bhd
Assuming the 90 days trading horizon Public Bank is expected to generate 4.51 times less return on investment than Deleum Bhd. But when comparing it to its historical volatility, Public Bank Bhd is 2.48 times less risky than Deleum Bhd. It trades about 0.04 of its potential returns per unit of risk. Deleum Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Deleum Bhd on September 14, 2024 and sell it today you would earn a total of 47.00 from holding Deleum Bhd or generate 51.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. Deleum Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| Deleum Bhd |
Public Bank and Deleum Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Deleum Bhd
The main advantage of trading using opposite Public Bank and Deleum Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Deleum Bhd 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 Deleum Bhd will offset losses from the drop in Deleum Bhd's long position.| Public Bank vs. Silver Ridge Holdings | Public Bank vs. Sports Toto Berhad | Public Bank vs. Apollo Food Holdings | Public Bank vs. TAS Offshore 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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