Correlation Between Dagang Nexchange and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Dagang Nexchange and PMB Technology 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 Dagang Nexchange and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dagang Nexchange Bhd and PMB Technology Bhd, you can compare the effects of market volatilities on Dagang Nexchange and PMB Technology 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 Dagang Nexchange with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dagang Nexchange and PMB Technology.
Diversification Opportunities for Dagang Nexchange and PMB Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dagang and PMB is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dagang Nexchange Bhd and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology Bhd and Dagang Nexchange 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 Dagang Nexchange Bhd are associated (or correlated) with PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Dagang Nexchange i.e., Dagang Nexchange and PMB Technology go up and down completely randomly.
Pair Corralation between Dagang Nexchange and PMB Technology
Assuming the 90 days trading horizon Dagang Nexchange Bhd is expected to under-perform the PMB Technology. In addition to that, Dagang Nexchange is 2.11 times more volatile than PMB Technology Bhd. It trades about -0.3 of its total potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.19 per unit of volatility. If you would invest 175.00 in PMB Technology Bhd on November 30, 2024 and sell it today you would lose (19.00) from holding PMB Technology Bhd or give up 10.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dagang Nexchange Bhd vs. PMB Technology Bhd
Performance |
| Timeline |
| Dagang Nexchange Bhd |
| PMB Technology Bhd |
Dagang Nexchange and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dagang Nexchange and PMB Technology
The main advantage of trading using opposite Dagang Nexchange and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dagang Nexchange position performs unexpectedly, PMB Technology 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 PMB Technology will offset losses from the drop in PMB Technology's long position.| Dagang Nexchange vs. Cosmos Technology International | Dagang Nexchange vs. Diversified Gateway Solutions | Dagang Nexchange vs. Cloudpoint Technology Berhad | Dagang Nexchange vs. Sports Toto Berhad |
| PMB Technology vs. Rubberex M | PMB Technology vs. Genetec Technology Bhd | PMB Technology vs. Advanced Packaging Tech | PMB Technology vs. Southern Steel 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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