Correlation Between Public Bank and Aeon Credit
Can any of the company-specific risk be diversified away by investing in both Public Bank and Aeon Credit 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 Aeon Credit 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 Aeon Credit Service, you can compare the effects of market volatilities on Public Bank and Aeon Credit 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 Aeon Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Aeon Credit.
Diversification Opportunities for Public Bank and Aeon Credit
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Public and Aeon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Aeon Credit Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Credit Service 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 Aeon Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Credit Service has no effect on the direction of Public Bank i.e., Public Bank and Aeon Credit go up and down completely randomly.
Pair Corralation between Public Bank and Aeon Credit
Assuming the 90 days trading horizon Public Bank is expected to generate 1.81 times less return on investment than Aeon Credit. But when comparing it to its historical volatility, Public Bank Bhd is 1.22 times less risky than Aeon Credit. It trades about 0.02 of its potential returns per unit of risk. Aeon Credit Service is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 594.00 in Aeon Credit Service on August 27, 2024 and sell it today you would earn a total of 86.00 from holding Aeon Credit Service or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. Aeon Credit Service
Performance |
| Timeline |
| Public Bank Bhd |
| Aeon Credit Service |
Public Bank and Aeon Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Aeon Credit
The main advantage of trading using opposite Public Bank and Aeon Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Aeon Credit 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 Aeon Credit will offset losses from the drop in Aeon Credit's long position.| Public Bank vs. Privasia Technology Bhd | Public Bank vs. ONETECH SOLUTIONS HOLDINGS | Public Bank vs. Lysaght Galvanized Steel | Public Bank vs. PMB Technology Bhd |
| Aeon Credit vs. Press Metal Bhd | Aeon Credit vs. Malayan Banking Bhd | Aeon Credit vs. Cengild Medical Berhad | Aeon Credit vs. Public Bank 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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