Correlation Between Public Bank and Eden
Can any of the company-specific risk be diversified away by investing in both Public Bank and Eden 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 Eden 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 Eden Inc Bhd, you can compare the effects of market volatilities on Public Bank and Eden 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 Eden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Eden.
Diversification Opportunities for Public Bank and Eden
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Public and Eden is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Eden Inc Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eden Inc 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 Eden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eden Inc Bhd has no effect on the direction of Public Bank i.e., Public Bank and Eden go up and down completely randomly.
Pair Corralation between Public Bank and Eden
Assuming the 90 days trading horizon Public Bank Bhd is expected to generate 0.23 times more return on investment than Eden. However, Public Bank Bhd is 4.28 times less risky than Eden. It trades about 0.04 of its potential returns per unit of risk. Eden Inc Bhd is currently generating about -0.01 per unit of risk. If you would invest 406.00 in Public Bank Bhd on September 3, 2024 and sell it today you would earn a total of 41.00 from holding Public Bank Bhd or generate 10.1% 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. Eden Inc Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| Eden Inc Bhd |
Public Bank and Eden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Eden
The main advantage of trading using opposite Public Bank and Eden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Eden 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 Eden will offset losses from the drop in Eden's long position.| Public Bank vs. Computer Forms Bhd | Public Bank vs. Radiant Globaltech Bhd | Public Bank vs. Pantech Group Holdings | Public Bank vs. Duopharma Biotech Bhd |
| Eden vs. Malayan Banking Bhd | Eden vs. Public Bank Bhd | Eden vs. Petronas Chemicals Group | Eden 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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