Correlation Between Public Bank and ATA IMS
Can any of the company-specific risk be diversified away by investing in both Public Bank and ATA IMS 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 ATA IMS 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 ATA IMS Bhd, you can compare the effects of market volatilities on Public Bank and ATA IMS 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 ATA IMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and ATA IMS.
Diversification Opportunities for Public Bank and ATA IMS
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Public and ATA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and ATA IMS Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATA IMS 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 ATA IMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATA IMS Bhd has no effect on the direction of Public Bank i.e., Public Bank and ATA IMS go up and down completely randomly.
Pair Corralation between Public Bank and ATA IMS
Assuming the 90 days trading horizon Public Bank Bhd is expected to generate 0.25 times more return on investment than ATA IMS. However, Public Bank Bhd is 4.05 times less risky than ATA IMS. It trades about 0.07 of its potential returns per unit of risk. ATA IMS Bhd is currently generating about 0.02 per unit of risk. If you would invest 442.00 in Public Bank Bhd on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Public Bank Bhd or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. ATA IMS Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| ATA IMS Bhd |
Public Bank and ATA IMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and ATA IMS
The main advantage of trading using opposite Public Bank and ATA IMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, ATA IMS 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 ATA IMS will offset losses from the drop in ATA IMS's long position.| Public Bank vs. Malayan Banking Bhd | Public Bank vs. Hong Leong Bank | Public Bank vs. RHB Bank Bhd | Public Bank vs. Carlsberg Brewery Malaysia |
| ATA IMS vs. Malayan Banking Bhd | ATA IMS vs. Public Bank Bhd | ATA IMS vs. Petronas Chemicals Group | ATA IMS 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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