Correlation Between PMB Technology and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Cosmos 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 Cosmos 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 Cosmos Technology International, you can compare the effects of market volatilities on PMB Technology and Cosmos 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 Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Cosmos Technology.
Diversification Opportunities for PMB Technology and Cosmos Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PMB and Cosmos is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology 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 Cosmos Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Technology has no effect on the direction of PMB Technology i.e., PMB Technology and Cosmos Technology go up and down completely randomly.
Pair Corralation between PMB Technology and Cosmos Technology
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Cosmos Technology. But the stock apears to be less risky and, when comparing its historical volatility, PMB Technology Bhd is 1.13 times less risky than Cosmos Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Cosmos Technology International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Cosmos Technology International on August 31, 2024 and sell it today you would lose (3.00) from holding Cosmos Technology International or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
PMB Technology Bhd vs. Cosmos Technology Internationa
Performance |
| Timeline |
| PMB Technology Bhd |
| Cosmos Technology |
PMB Technology and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Cosmos Technology
The main advantage of trading using opposite PMB Technology and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Cosmos 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 Cosmos Technology will offset losses from the drop in Cosmos Technology's long position.| PMB Technology vs. Pantech Group Holdings | PMB Technology vs. Coraza Integrated Technology | PMB Technology vs. Choo Bee Metal | PMB Technology vs. Eonmetall Group Bhd |
| Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Impiana Hotels Bhd | Cosmos Technology vs. Mycron Steel Bhd | Cosmos Technology vs. Sports Toto Berhad |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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