Correlation Between Kobay Tech and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Kobay Tech and PMB Technology 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 Kobay Tech and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kobay Tech Bhd and PMB Technology Bhd, you can compare the effects of market volatilities on Kobay Tech and PMB Technology 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 Kobay Tech with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kobay Tech and PMB Technology.
Diversification Opportunities for Kobay Tech and PMB Technology
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kobay and PMB is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology Bhd and Kobay Tech 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 Kobay Tech Bhd are associated (or correlated) with PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Kobay Tech i.e., Kobay Tech and PMB Technology go up and down completely randomly.
Pair Corralation between Kobay Tech and PMB Technology
Assuming the 90 days trading horizon Kobay Tech Bhd is expected to generate 1.06 times more return on investment than PMB Technology. However, Kobay Tech is 1.06 times more volatile than PMB Technology Bhd. It trades about 0.19 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.11 per unit of risk. If you would invest 126.00 in Kobay Tech Bhd on September 3, 2024 and sell it today you would earn a total of 18.00 from holding Kobay Tech Bhd or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kobay Tech Bhd vs. PMB Technology Bhd
Performance |
| Timeline |
| Kobay Tech Bhd |
| PMB Technology Bhd |
Kobay Tech and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kobay Tech and PMB Technology
The main advantage of trading using opposite Kobay Tech and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kobay Tech position performs unexpectedly, PMB Technology 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 PMB Technology will offset losses from the drop in PMB Technology's long position.| Kobay Tech vs. Dnonce Tech Bhd | Kobay Tech vs. JF Technology BHD | Kobay Tech vs. Uchi Technologies Bhd | Kobay Tech vs. K One Technology Bhd |
| PMB Technology vs. Press Metal Bhd | PMB Technology vs. CSC Steel Holdings | PMB Technology vs. Malaysia Steel Works | PMB Technology vs. Choo Bee Metal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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