Correlation Between Melewar Industrial and Pantech Group
Can any of the company-specific risk be diversified away by investing in both Melewar Industrial and Pantech Group 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 Melewar Industrial and Pantech Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melewar Industrial Group and Pantech Group Holdings, you can compare the effects of market volatilities on Melewar Industrial and Pantech Group 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 Melewar Industrial with a short position of Pantech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melewar Industrial and Pantech Group.
Diversification Opportunities for Melewar Industrial and Pantech Group
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Melewar and Pantech is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Melewar Industrial Group and Pantech Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pantech Group Holdings and Melewar Industrial 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 Melewar Industrial Group are associated (or correlated) with Pantech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pantech Group Holdings has no effect on the direction of Melewar Industrial i.e., Melewar Industrial and Pantech Group go up and down completely randomly.
Pair Corralation between Melewar Industrial and Pantech Group
Assuming the 90 days trading horizon Melewar Industrial Group is expected to under-perform the Pantech Group. In addition to that, Melewar Industrial is 1.95 times more volatile than Pantech Group Holdings. It trades about -0.01 of its total potential returns per unit of risk. Pantech Group Holdings is currently generating about 0.04 per unit of volatility. If you would invest 68.00 in Pantech Group Holdings on November 29, 2024 and sell it today you would earn a total of 20.00 from holding Pantech Group Holdings or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Melewar Industrial Group vs. Pantech Group Holdings
Performance |
| Timeline |
| Melewar Industrial |
| Pantech Group Holdings |
Melewar Industrial and Pantech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melewar Industrial and Pantech Group
The main advantage of trading using opposite Melewar Industrial and Pantech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melewar Industrial position performs unexpectedly, Pantech Group 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 Pantech Group will offset losses from the drop in Pantech Group's long position.| Melewar Industrial vs. Tex Cycle Technology | Melewar Industrial vs. Privasia Technology Bhd | Melewar Industrial vs. Lysaght Galvanized Steel | Melewar Industrial vs. Ho Hup Construction |
| Pantech Group vs. Cengild Medical Berhad | Pantech Group vs. Riverview Rubber Estates | Pantech Group vs. YTL Hospitality REIT | Pantech Group vs. Berjaya Food 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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