Correlation Between Choo Bee and Press Metal
Can any of the company-specific risk be diversified away by investing in both Choo Bee 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 Choo Bee and Press Metal 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 Press Metal Bhd, you can compare the effects of market volatilities on Choo Bee 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 Choo Bee with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Press Metal.
Diversification Opportunities for Choo Bee and Press Metal
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choo and Press is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal 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 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 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 Choo Bee i.e., Choo Bee and Press Metal go up and down completely randomly.
Pair Corralation between Choo Bee and Press Metal
Assuming the 90 days trading horizon Choo Bee is expected to generate 7.25 times less return on investment than Press Metal. In addition to that, Choo Bee is 1.07 times more volatile than Press Metal Bhd. It trades about 0.01 of its total potential returns per unit of risk. Press Metal Bhd is currently generating about 0.05 per unit of volatility. If you would invest 479.00 in Press Metal Bhd on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Press Metal Bhd or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Press Metal Bhd
Performance |
| Timeline |
| Choo Bee Metal |
| Press Metal Bhd |
Choo Bee and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Press Metal
The main advantage of trading using opposite Choo Bee and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee 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.| Choo Bee vs. Greatech Technology Bhd | Choo Bee vs. Public Packages Holdings | Choo Bee vs. Cosmos Technology International | Choo Bee vs. Melewar Industrial Group |
| Press Metal vs. ES Ceramics Technology | Press Metal vs. Sports Toto Berhad | Press Metal vs. PMB Technology Bhd | Press Metal vs. Lysaght Galvanized Steel |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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