Correlation Between PIE Industrial and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both PIE Industrial and ES Ceramics 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 PIE Industrial and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIE Industrial Bhd and ES Ceramics Technology, you can compare the effects of market volatilities on PIE Industrial and ES Ceramics 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 PIE Industrial with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and ES Ceramics.
Diversification Opportunities for PIE Industrial and ES Ceramics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PIE and 0100 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and PIE Industrial 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 PIE Industrial Bhd are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of PIE Industrial i.e., PIE Industrial and ES Ceramics go up and down completely randomly.
Pair Corralation between PIE Industrial and ES Ceramics
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to under-perform the ES Ceramics. But the stock apears to be less risky and, when comparing its historical volatility, PIE Industrial Bhd is 1.72 times less risky than ES Ceramics. The stock trades about -0.26 of its potential returns per unit of risk. The ES Ceramics Technology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 16.00 in ES Ceramics Technology on October 23, 2024 and sell it today you would lose (1.00) from holding ES Ceramics Technology or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
PIE Industrial Bhd vs. ES Ceramics Technology
Performance |
| Timeline |
| PIE Industrial Bhd |
| ES Ceramics Technology |
PIE Industrial and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIE Industrial and ES Ceramics
The main advantage of trading using opposite PIE Industrial and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| PIE Industrial vs. Greatech Technology Bhd | PIE Industrial vs. Uwc Bhd | PIE Industrial vs. Genetec Technology Bhd | PIE Industrial vs. Dufu Tech Corp |
| ES Ceramics vs. YX Precious Metals | ES Ceramics vs. Melewar Industrial Group | ES Ceramics vs. Mercury Industries Bhd | ES Ceramics vs. Star Media Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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