Correlation Between PESTECH International and Eonmetall Group
Can any of the company-specific risk be diversified away by investing in both PESTECH International and Eonmetall Group 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 Eonmetall Group 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 Eonmetall Group Bhd, you can compare the effects of market volatilities on PESTECH International and Eonmetall Group 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 Eonmetall Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PESTECH International and Eonmetall Group.
Diversification Opportunities for PESTECH International and Eonmetall Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PESTECH and Eonmetall is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PESTECH International Bhd and Eonmetall Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eonmetall Group Bhd 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 Eonmetall Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eonmetall Group Bhd has no effect on the direction of PESTECH International i.e., PESTECH International and Eonmetall Group go up and down completely randomly.
Pair Corralation between PESTECH International and Eonmetall Group
Assuming the 90 days trading horizon PESTECH International Bhd is expected to generate 1.52 times more return on investment than Eonmetall Group. However, PESTECH International is 1.52 times more volatile than Eonmetall Group Bhd. It trades about 0.11 of its potential returns per unit of risk. Eonmetall Group Bhd is currently generating about 0.01 per unit of risk. If you would invest 13.00 in PESTECH International Bhd on September 4, 2024 and sell it today you would earn a total of 1.00 from holding PESTECH International Bhd or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PESTECH International Bhd vs. Eonmetall Group Bhd
Performance |
| Timeline |
| PESTECH International Bhd |
| Eonmetall Group Bhd |
PESTECH International and Eonmetall Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PESTECH International and Eonmetall Group
The main advantage of trading using opposite PESTECH International and Eonmetall Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PESTECH International position performs unexpectedly, Eonmetall Group 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 Eonmetall Group will offset losses from the drop in Eonmetall Group's long position.| PESTECH International vs. Eonmetall Group Bhd | PESTECH International vs. Radiant Globaltech Bhd | PESTECH International vs. Uchi Technologies Bhd | PESTECH International vs. SFP Tech Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |