Correlation Between PMB Technology and Sungei Bagan
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Sungei Bagan 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 Sungei Bagan 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 Sungei Bagan Rubber, you can compare the effects of market volatilities on PMB Technology and Sungei Bagan 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 Sungei Bagan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Sungei Bagan.
Diversification Opportunities for PMB Technology and Sungei Bagan
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PMB and Sungei is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Sungei Bagan Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungei Bagan Rubber 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 Sungei Bagan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungei Bagan Rubber has no effect on the direction of PMB Technology i.e., PMB Technology and Sungei Bagan go up and down completely randomly.
Pair Corralation between PMB Technology and Sungei Bagan
Assuming the 90 days trading horizon PMB Technology Bhd is expected to generate 6.15 times more return on investment than Sungei Bagan. However, PMB Technology is 6.15 times more volatile than Sungei Bagan Rubber. It trades about 0.0 of its potential returns per unit of risk. Sungei Bagan Rubber is currently generating about -0.7 per unit of risk. If you would invest 173.00 in PMB Technology Bhd on August 27, 2024 and sell it today you would lose (2.00) from holding PMB Technology Bhd or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Sungei Bagan Rubber
Performance |
| Timeline |
| PMB Technology Bhd |
| Sungei Bagan Rubber |
PMB Technology and Sungei Bagan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Sungei Bagan
The main advantage of trading using opposite PMB Technology and Sungei Bagan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Sungei Bagan 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 Sungei Bagan will offset losses from the drop in Sungei Bagan's long position.| PMB Technology vs. Press Metal Bhd | PMB Technology vs. Southern Steel Bhd | PMB Technology vs. Eonmetall Group Bhd |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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