Correlation Between Malaysia Steel and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Malaysia Steel 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 Malaysia Steel and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaysia Steel Works and PMB Technology Bhd, you can compare the effects of market volatilities on Malaysia Steel 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 Malaysia Steel with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaysia Steel and PMB Technology.
Diversification Opportunities for Malaysia Steel and PMB Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Malaysia and PMB is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Malaysia Steel Works 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 Malaysia Steel 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 Malaysia Steel Works 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 Malaysia Steel i.e., Malaysia Steel and PMB Technology go up and down completely randomly.
Pair Corralation between Malaysia Steel and PMB Technology
Assuming the 90 days trading horizon Malaysia Steel Works is expected to generate 1.08 times more return on investment than PMB Technology. However, Malaysia Steel is 1.08 times more volatile than PMB Technology Bhd. It trades about 0.0 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.06 per unit of risk. If you would invest 37.00 in Malaysia Steel Works on August 28, 2024 and sell it today you would lose (7.00) from holding Malaysia Steel Works or give up 18.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malaysia Steel Works vs. PMB Technology Bhd
Performance |
| Timeline |
| Malaysia Steel Works |
| PMB Technology Bhd |
Malaysia Steel and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malaysia Steel and PMB Technology
The main advantage of trading using opposite Malaysia Steel and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaysia Steel 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.| Malaysia Steel vs. Mercury Industries Bhd | Malaysia Steel vs. PMB Technology Bhd | Malaysia Steel vs. Mycron Steel Bhd | Malaysia Steel vs. Choo Bee Metal |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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