Correlation Between Public Bank and Central Industrial
Can any of the company-specific risk be diversified away by investing in both Public Bank and Central Industrial 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 Central Industrial 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 Central Industrial Corp, you can compare the effects of market volatilities on Public Bank and Central Industrial 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 Central Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Central Industrial.
Diversification Opportunities for Public Bank and Central Industrial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and Central is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Central Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industrial Corp 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 Central Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industrial Corp has no effect on the direction of Public Bank i.e., Public Bank and Central Industrial go up and down completely randomly.
Pair Corralation between Public Bank and Central Industrial
Assuming the 90 days trading horizon Public Bank Bhd is expected to under-perform the Central Industrial. In addition to that, Public Bank is 1.95 times more volatile than Central Industrial Corp. It trades about -0.08 of its total potential returns per unit of risk. Central Industrial Corp is currently generating about 0.17 per unit of volatility. If you would invest 82.00 in Central Industrial Corp on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Central Industrial Corp or generate 4.88% 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. Central Industrial Corp
Performance |
| Timeline |
| Public Bank Bhd |
| Central Industrial Corp |
Public Bank and Central Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Central Industrial
The main advantage of trading using opposite Public Bank and Central Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Central Industrial 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 Central Industrial will offset losses from the drop in Central Industrial'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 |
| Central Industrial vs. YTL Hospitality REIT | Central Industrial vs. Choo Bee Metal | Central Industrial vs. Oriental Food Industries | Central Industrial vs. Apollo Food Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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