Correlation Between Magni Tech and PPB Group
Can any of the company-specific risk be diversified away by investing in both Magni Tech and PPB 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 Magni Tech and PPB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magni Tech Industries and PPB Group Bhd, you can compare the effects of market volatilities on Magni Tech and PPB 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 Magni Tech with a short position of PPB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and PPB Group.
Diversification Opportunities for Magni Tech and PPB Group
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magni and PPB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries and PPB Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPB Group Bhd and Magni 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 Magni Tech Industries are associated (or correlated) with PPB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPB Group Bhd has no effect on the direction of Magni Tech i.e., Magni Tech and PPB Group go up and down completely randomly.
Pair Corralation between Magni Tech and PPB Group
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 2.0 times more return on investment than PPB Group. However, Magni Tech is 2.0 times more volatile than PPB Group Bhd. It trades about 0.12 of its potential returns per unit of risk. PPB Group Bhd is currently generating about -0.17 per unit of risk. If you would invest 242.00 in Magni Tech Industries on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Magni Tech Industries or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Magni Tech Industries vs. PPB Group Bhd
Performance |
| Timeline |
| Magni Tech Industries |
| PPB Group Bhd |
Magni Tech and PPB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and PPB Group
The main advantage of trading using opposite Magni Tech and PPB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech position performs unexpectedly, PPB 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 PPB Group will offset losses from the drop in PPB Group's long position.| Magni Tech vs. ES Ceramics Technology | Magni Tech vs. Minetech Resources Bhd | Magni Tech vs. AirAsia X Bhd | Magni Tech vs. Tambun Indah Land |
| PPB Group vs. Petronas Chemicals Group | PPB Group vs. YX Precious Metals | PPB Group vs. Datasonic Group Bhd | PPB Group vs. KPJ Healthcare 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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