Correlation Between PMB Technology and Privasia Technology
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Privasia 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 PMB Technology and Privasia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PMB Technology Bhd and Privasia Technology Bhd, you can compare the effects of market volatilities on PMB Technology and Privasia 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 PMB Technology with a short position of Privasia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Privasia Technology.
Diversification Opportunities for PMB Technology and Privasia Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PMB and Privasia is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Privasia Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Privasia Technology Bhd and PMB Technology 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 PMB Technology Bhd are associated (or correlated) with Privasia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Privasia Technology Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Privasia Technology go up and down completely randomly.
Pair Corralation between PMB Technology and Privasia Technology
Assuming the 90 days trading horizon PMB Technology is expected to generate 33.83 times less return on investment than Privasia Technology. But when comparing it to its historical volatility, PMB Technology Bhd is 1.79 times less risky than Privasia Technology. It trades about 0.0 of its potential returns per unit of risk. Privasia Technology Bhd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Privasia Technology Bhd on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Privasia Technology Bhd or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Privasia Technology Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| Privasia Technology Bhd |
PMB Technology and Privasia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Privasia Technology
The main advantage of trading using opposite PMB Technology and Privasia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Privasia 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 Privasia Technology will offset losses from the drop in Privasia Technology's long position.The idea behind PMB Technology Bhd and Privasia Technology Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Privasia Technology vs. Magni Tech Industries | Privasia Technology vs. Binasat Communications Bhd | Privasia Technology vs. RHB Bank Bhd | Privasia Technology vs. BP Plastics Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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