Correlation Between Public Bank and LPI Capital
Can any of the company-specific risk be diversified away by investing in both Public Bank and LPI Capital 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 LPI Capital 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 LPI Capital Bhd, you can compare the effects of market volatilities on Public Bank and LPI Capital 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 LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and LPI Capital.
Diversification Opportunities for Public Bank and LPI Capital
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Public and LPI is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital 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 LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of Public Bank i.e., Public Bank and LPI Capital go up and down completely randomly.
Pair Corralation between Public Bank and LPI Capital
Assuming the 90 days trading horizon Public Bank Bhd is expected to generate 1.32 times more return on investment than LPI Capital. However, Public Bank is 1.32 times more volatile than LPI Capital Bhd. It trades about 0.02 of its potential returns per unit of risk. LPI Capital Bhd is currently generating about -0.09 per unit of risk. If you would invest 446.00 in Public Bank Bhd on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Public Bank Bhd or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Public Bank Bhd vs. LPI Capital Bhd
Performance |
| Timeline |
| Public Bank Bhd |
| LPI Capital Bhd |
Public Bank and LPI Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and LPI Capital
The main advantage of trading using opposite Public Bank and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital's long position.| Public Bank vs. K One Technology Bhd | Public Bank vs. DC HEALTHCARE HOLDINGS | Public Bank vs. Impiana Hotels Bhd | Public Bank vs. YX Precious Metals |
| LPI Capital vs. Duopharma Biotech Bhd | LPI Capital vs. Sunzen Biotech Bhd | LPI Capital vs. Pantech Group Holdings | LPI Capital vs. Dataprep Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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