Correlation Between Pantech Group and Press Metal
Can any of the company-specific risk be diversified away by investing in both Pantech Group and Press Metal 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 Pantech Group and Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pantech Group Holdings and Press Metal Bhd, you can compare the effects of market volatilities on Pantech Group and Press Metal 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 Pantech Group with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantech Group and Press Metal.
Diversification Opportunities for Pantech Group and Press Metal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pantech and Press is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pantech Group Holdings and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal Bhd and Pantech Group 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 Pantech Group Holdings are associated (or correlated) with Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of Pantech Group i.e., Pantech Group and Press Metal go up and down completely randomly.
Pair Corralation between Pantech Group and Press Metal
Assuming the 90 days trading horizon Pantech Group Holdings is expected to generate 0.84 times more return on investment than Press Metal. However, Pantech Group Holdings is 1.19 times less risky than Press Metal. It trades about 0.02 of its potential returns per unit of risk. Press Metal Bhd is currently generating about 0.01 per unit of risk. If you would invest 93.00 in Pantech Group Holdings on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Pantech Group Holdings or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantech Group Holdings vs. Press Metal Bhd
Performance |
| Timeline |
| Pantech Group Holdings |
| Press Metal Bhd |
Pantech Group and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantech Group and Press Metal
The main advantage of trading using opposite Pantech Group and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantech Group position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.The idea behind Pantech Group Holdings and Press Metal Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Press Metal vs. KPJ Healthcare Bhd | Press Metal vs. PIE Industrial Bhd | Press Metal vs. Icon Offshore Bhd | Press Metal vs. Central Industrial Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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