Correlation Between Public Bank and Boustead Heavy
Can any of the company-specific risk be diversified away by investing in both Public Bank and Boustead Heavy 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 Boustead Heavy 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 Boustead Heavy Industries, you can compare the effects of market volatilities on Public Bank and Boustead Heavy 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 Boustead Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and Boustead Heavy.
Diversification Opportunities for Public Bank and Boustead Heavy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Public and Boustead is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Boustead Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boustead Heavy Industries 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 Boustead Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boustead Heavy Industries has no effect on the direction of Public Bank i.e., Public Bank and Boustead Heavy go up and down completely randomly.
Pair Corralation between Public Bank and Boustead Heavy
Assuming the 90 days trading horizon Public Bank Bhd is expected to generate 0.36 times more return on investment than Boustead Heavy. However, Public Bank Bhd is 2.79 times less risky than Boustead Heavy. It trades about 0.12 of its potential returns per unit of risk. Boustead Heavy Industries is currently generating about -0.16 per unit of risk. If you would invest 438.00 in Public Bank Bhd on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Public Bank Bhd or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. Boustead Heavy Industries
Performance |
| Timeline |
| Public Bank Bhd |
| Boustead Heavy Industries |
Public Bank and Boustead Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and Boustead Heavy
The main advantage of trading using opposite Public Bank and Boustead Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, Boustead Heavy 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 Boustead Heavy will offset losses from the drop in Boustead Heavy's long position.| Public Bank vs. Alliance Financial Group | Public Bank vs. ES Ceramics Technology | Public Bank vs. Farm Price Holdings | Public Bank vs. PMB Technology Bhd |
| Boustead Heavy vs. Cengild Medical Berhad | Boustead Heavy vs. Al Aqar Healthcare | Boustead Heavy vs. Southern Steel Bhd | Boustead Heavy vs. CSC Steel 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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