Correlation Between PIE Industrial and Axiata Group
Can any of the company-specific risk be diversified away by investing in both PIE Industrial and Axiata 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 PIE Industrial and Axiata Group 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 Axiata Group Bhd, you can compare the effects of market volatilities on PIE Industrial and Axiata 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 PIE Industrial with a short position of Axiata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and Axiata Group.
Diversification Opportunities for PIE Industrial and Axiata Group
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PIE and Axiata is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd and Axiata Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiata Group Bhd 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 Axiata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiata Group Bhd has no effect on the direction of PIE Industrial i.e., PIE Industrial and Axiata Group go up and down completely randomly.
Pair Corralation between PIE Industrial and Axiata Group
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to generate 1.98 times more return on investment than Axiata Group. However, PIE Industrial is 1.98 times more volatile than Axiata Group Bhd. It trades about 0.03 of its potential returns per unit of risk. Axiata Group Bhd is currently generating about -0.07 per unit of risk. If you would invest 319.00 in PIE Industrial Bhd on December 5, 2024 and sell it today you would earn a total of 41.00 from holding PIE Industrial Bhd or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PIE Industrial Bhd vs. Axiata Group Bhd
Performance |
| Timeline |
| PIE Industrial Bhd |
| Axiata Group Bhd |
PIE Industrial and Axiata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIE Industrial and Axiata Group
The main advantage of trading using opposite PIE Industrial and Axiata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial position performs unexpectedly, Axiata 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 Axiata Group will offset losses from the drop in Axiata Group's long position.| PIE Industrial vs. Impiana Hotels Bhd | PIE Industrial vs. Silver Ridge Holdings | PIE Industrial vs. Sapura Industrial Bhd | PIE Industrial vs. British American Tobacco |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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