Correlation Between Choo Bee and PESTECH International
Can any of the company-specific risk be diversified away by investing in both Choo Bee and PESTECH International 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 Choo Bee and PESTECH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and PESTECH International Bhd, you can compare the effects of market volatilities on Choo Bee and PESTECH International 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 Choo Bee with a short position of PESTECH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and PESTECH International.
Diversification Opportunities for Choo Bee and PESTECH International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choo and PESTECH is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and PESTECH International Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PESTECH International Bhd and Choo Bee 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 Choo Bee Metal are associated (or correlated) with PESTECH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PESTECH International Bhd has no effect on the direction of Choo Bee i.e., Choo Bee and PESTECH International go up and down completely randomly.
Pair Corralation between Choo Bee and PESTECH International
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the PESTECH International. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 4.25 times less risky than PESTECH International. The stock trades about -0.07 of its potential returns per unit of risk. The PESTECH International Bhd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 14.00 in PESTECH International Bhd on October 30, 2024 and sell it today you would earn a total of 3.00 from holding PESTECH International Bhd or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
Choo Bee Metal vs. PESTECH International Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| PESTECH International Bhd |
Choo Bee and PESTECH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and PESTECH International
The main advantage of trading using opposite Choo Bee and PESTECH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, PESTECH International 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 PESTECH International will offset losses from the drop in PESTECH International's long position.| Choo Bee vs. Awanbiru Technology Bhd | Choo Bee vs. Eonmetall Group Bhd | Choo Bee vs. Press Metal Bhd | Choo Bee vs. Farm Price Holdings |
| PESTECH International vs. Sungei Bagan Rubber | PESTECH International vs. FARM FRESH BERHAD | PESTECH International vs. CSC Steel Holdings | PESTECH International vs. Mycron 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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