Correlation Between PMB Technology and Nova Wellness
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Nova Wellness 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 Nova Wellness 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 Nova Wellness Group, you can compare the effects of market volatilities on PMB Technology and Nova Wellness 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 Nova Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Nova Wellness.
Diversification Opportunities for PMB Technology and Nova Wellness
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between PMB and Nova is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Nova Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Wellness Group 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 Nova Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Wellness Group has no effect on the direction of PMB Technology i.e., PMB Technology and Nova Wellness go up and down completely randomly.
Pair Corralation between PMB Technology and Nova Wellness
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Nova Wellness. In addition to that, PMB Technology is 1.06 times more volatile than Nova Wellness Group. It trades about -0.07 of its total potential returns per unit of risk. Nova Wellness Group is currently generating about -0.06 per unit of volatility. If you would invest 87.00 in Nova Wellness Group on October 30, 2024 and sell it today you would lose (46.00) from holding Nova Wellness Group or give up 52.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.13% |
| Values | Daily Returns |
PMB Technology Bhd vs. Nova Wellness Group
Performance |
| Timeline |
| PMB Technology Bhd |
| Nova Wellness Group |
PMB Technology and Nova Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Nova Wellness
The main advantage of trading using opposite PMB Technology and Nova Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Nova Wellness 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 Nova Wellness will offset losses from the drop in Nova Wellness' long position.| PMB Technology vs. Cengild Medical Berhad | PMB Technology vs. YTL Hospitality REIT | PMB Technology vs. Sungei Bagan Rubber | PMB Technology vs. Berjaya Food Bhd |
| Nova Wellness vs. PMB Technology Bhd | Nova Wellness vs. Kluang Rubber | Nova Wellness vs. K One Technology Bhd | Nova Wellness vs. Radiant Globaltech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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