Correlation Between Tadmax Resources and Pesona Metro
Can any of the company-specific risk be diversified away by investing in both Tadmax Resources and Pesona Metro 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 Tadmax Resources and Pesona Metro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tadmax Resources Berhad and Pesona Metro Holdings, you can compare the effects of market volatilities on Tadmax Resources and Pesona Metro 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 Tadmax Resources with a short position of Pesona Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tadmax Resources and Pesona Metro.
Diversification Opportunities for Tadmax Resources and Pesona Metro
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tadmax and Pesona is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tadmax Resources Berhad and Pesona Metro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pesona Metro Holdings and Tadmax Resources 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 Tadmax Resources Berhad are associated (or correlated) with Pesona Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pesona Metro Holdings has no effect on the direction of Tadmax Resources i.e., Tadmax Resources and Pesona Metro go up and down completely randomly.
Pair Corralation between Tadmax Resources and Pesona Metro
Assuming the 90 days trading horizon Tadmax Resources Berhad is expected to under-perform the Pesona Metro. But the stock apears to be less risky and, when comparing its historical volatility, Tadmax Resources Berhad is 1.31 times less risky than Pesona Metro. The stock trades about -0.02 of its potential returns per unit of risk. The Pesona Metro Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Pesona Metro Holdings on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Pesona Metro Holdings or generate 58.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tadmax Resources Berhad vs. Pesona Metro Holdings
Performance |
| Timeline |
| Tadmax Resources Berhad |
| Pesona Metro Holdings |
Tadmax Resources and Pesona Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tadmax Resources and Pesona Metro
The main advantage of trading using opposite Tadmax Resources and Pesona Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tadmax Resources position performs unexpectedly, Pesona Metro 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 Pesona Metro will offset losses from the drop in Pesona Metro's long position.| Tadmax Resources vs. IHH Healthcare Bhd | Tadmax Resources vs. Datasonic Group Bhd | Tadmax Resources vs. YTL Hospitality REIT | Tadmax Resources vs. TAS Offshore Bhd |
| Pesona Metro vs. Sunway Construction Group | Pesona Metro vs. Ho Hup Construction | Pesona Metro vs. Central Industrial Corp | Pesona Metro vs. Protasco 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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