Correlation Between PMB Technology and Amalgamated Industrial
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Amalgamated Industrial 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 Amalgamated Industrial 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 Amalgamated Industrial Steel, you can compare the effects of market volatilities on PMB Technology and Amalgamated Industrial 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 Amalgamated Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Amalgamated Industrial.
Diversification Opportunities for PMB Technology and Amalgamated Industrial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between PMB and Amalgamated is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Amalgamated Industrial Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Industrial 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 Amalgamated Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Industrial has no effect on the direction of PMB Technology i.e., PMB Technology and Amalgamated Industrial go up and down completely randomly.
Pair Corralation between PMB Technology and Amalgamated Industrial
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Amalgamated Industrial. But the stock apears to be less risky and, when comparing its historical volatility, PMB Technology Bhd is 1.85 times less risky than Amalgamated Industrial. The stock trades about -0.03 of its potential returns per unit of risk. The Amalgamated Industrial Steel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Amalgamated Industrial Steel on September 12, 2024 and sell it today you would lose (2.00) from holding Amalgamated Industrial Steel or give up 14.29% 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. Amalgamated Industrial Steel
Performance |
| Timeline |
| PMB Technology Bhd |
| Amalgamated Industrial |
PMB Technology and Amalgamated Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Amalgamated Industrial
The main advantage of trading using opposite PMB Technology and Amalgamated Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Amalgamated Industrial 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 Amalgamated Industrial will offset losses from the drop in Amalgamated Industrial'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 |
| Amalgamated Industrial vs. Fitters Diversified Bhd | Amalgamated Industrial vs. Al Aqar Healthcare | Amalgamated Industrial vs. PMB Technology Bhd | Amalgamated Industrial vs. Digistar 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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