Correlation Between PESTECH International and Sports Toto
Can any of the company-specific risk be diversified away by investing in both PESTECH International and Sports Toto 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 PESTECH International and Sports Toto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PESTECH International Bhd and Sports Toto Berhad, you can compare the effects of market volatilities on PESTECH International and Sports Toto 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 PESTECH International with a short position of Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of PESTECH International and Sports Toto.
Diversification Opportunities for PESTECH International and Sports Toto
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between PESTECH and Sports is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PESTECH International Bhd and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad and PESTECH International 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 PESTECH International Bhd are associated (or correlated) with Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of PESTECH International i.e., PESTECH International and Sports Toto go up and down completely randomly.
Pair Corralation between PESTECH International and Sports Toto
Assuming the 90 days trading horizon PESTECH International Bhd is expected to generate 4.46 times more return on investment than Sports Toto. However, PESTECH International is 4.46 times more volatile than Sports Toto Berhad. It trades about 0.01 of its potential returns per unit of risk. Sports Toto Berhad is currently generating about 0.01 per unit of risk. If you would invest 18.00 in PESTECH International Bhd on November 2, 2024 and sell it today you would lose (1.00) from holding PESTECH International Bhd or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PESTECH International Bhd vs. Sports Toto Berhad
Performance |
| Timeline |
| PESTECH International Bhd |
| Sports Toto Berhad |
PESTECH International and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PESTECH International and Sports Toto
The main advantage of trading using opposite PESTECH International and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PESTECH International position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| PESTECH International vs. Sunway Construction Group | PESTECH International vs. JAKS Resources Bhd | PESTECH International vs. Tadmax Resources Berhad | PESTECH International vs. Pesona Metro Holdings |
| Sports Toto vs. Silver Ridge Holdings | Sports Toto vs. Public Packages Holdings | Sports Toto vs. Southern Steel Bhd | Sports Toto vs. Impiana Hotels 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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