Correlation Between Public Bank and Crescendo Bhd
Can any of the company-specific risk be diversified away by investing in both Public Bank and Crescendo 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 Crescendo 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 Crescendo Bhd, you can compare the effects of market volatilities on Public Bank and Crescendo 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 Crescendo Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Crescendo Bhd.
Diversification Opportunities for Public Bank and Crescendo Bhd
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Public and Crescendo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Crescendo Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescendo 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 Crescendo Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescendo Bhd has no effect on the direction of Public Bank i.e., Public Bank and Crescendo Bhd go up and down completely randomly.
Pair Corralation between Public Bank and Crescendo Bhd
Assuming the 90 days trading horizon Public Bank is expected to generate 5.67 times less return on investment than Crescendo Bhd. But when comparing it to its historical volatility, Public Bank Bhd is 3.14 times less risky than Crescendo Bhd. It trades about 0.21 of its potential returns per unit of risk. Crescendo Bhd is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Crescendo Bhd on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Crescendo Bhd or generate 23.28% 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. Crescendo Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| Crescendo Bhd |
Public Bank and Crescendo Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Crescendo Bhd
The main advantage of trading using opposite Public Bank and Crescendo Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Crescendo 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 Crescendo Bhd will offset losses from the drop in Crescendo Bhd's long position.The idea behind Public Bank Bhd and Crescendo Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Crescendo Bhd vs. Malayan Banking Bhd | Crescendo Bhd vs. Public Bank Bhd | Crescendo Bhd vs. Petronas Chemicals Group | Crescendo Bhd 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |