Correlation Between PMB Technology and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Carlsberg Brewery 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 Carlsberg Brewery 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 Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on PMB Technology and Carlsberg Brewery 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 Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Carlsberg Brewery.
Diversification Opportunities for PMB Technology and Carlsberg Brewery
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PMB and Carlsberg is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery 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 Carlsberg Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg Brewery has no effect on the direction of PMB Technology i.e., PMB Technology and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between PMB Technology and Carlsberg Brewery
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Carlsberg Brewery. In addition to that, PMB Technology is 3.38 times more volatile than Carlsberg Brewery Malaysia. It trades about -0.08 of its total potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.12 per unit of volatility. If you would invest 1,909 in Carlsberg Brewery Malaysia on September 12, 2024 and sell it today you would earn a total of 141.00 from holding Carlsberg Brewery Malaysia or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| PMB Technology Bhd |
| Carlsberg Brewery |
PMB Technology and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Carlsberg Brewery
The main advantage of trading using opposite PMB Technology and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Carlsberg Brewery 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 Carlsberg Brewery will offset losses from the drop in Carlsberg Brewery'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 |
| Carlsberg Brewery vs. YX Precious Metals | Carlsberg Brewery vs. Central Industrial Corp | Carlsberg Brewery vs. Choo Bee Metal | Carlsberg Brewery vs. Eonmetall Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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