Correlation Between PMB Technology and Radiant Globaltech
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Radiant Globaltech 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 Radiant Globaltech 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 Radiant Globaltech Bhd, you can compare the effects of market volatilities on PMB Technology and Radiant Globaltech 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 Radiant Globaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Radiant Globaltech.
Diversification Opportunities for PMB Technology and Radiant Globaltech
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PMB and Radiant is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Radiant Globaltech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Globaltech 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 Radiant Globaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Globaltech Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Radiant Globaltech go up and down completely randomly.
Pair Corralation between PMB Technology and Radiant Globaltech
Assuming the 90 days trading horizon PMB Technology Bhd is expected to generate 1.83 times more return on investment than Radiant Globaltech. However, PMB Technology is 1.83 times more volatile than Radiant Globaltech Bhd. It trades about 0.1 of its potential returns per unit of risk. Radiant Globaltech Bhd is currently generating about 0.01 per unit of risk. If you would invest 171.00 in PMB Technology Bhd on September 13, 2024 and sell it today you would earn a total of 11.00 from holding PMB Technology Bhd or generate 6.43% 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. Radiant Globaltech Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| Radiant Globaltech Bhd |
PMB Technology and Radiant Globaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Radiant Globaltech
The main advantage of trading using opposite PMB Technology and Radiant Globaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Radiant Globaltech 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 Radiant Globaltech will offset losses from the drop in Radiant Globaltech's long position.| PMB Technology vs. Press Metal Bhd | PMB Technology vs. Pantech Group Holdings | PMB Technology vs. CSC Steel Holdings | PMB Technology vs. Coraza Integrated Technology |
| Radiant Globaltech vs. Mr D I | Radiant Globaltech vs. Senheng New Retail | Radiant Globaltech vs. Al Aqar Healthcare | Radiant Globaltech vs. PMB Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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