Correlation Between PMB Technology and Mycron Steel
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Mycron Steel 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 Mycron Steel 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 Mycron Steel Bhd, you can compare the effects of market volatilities on PMB Technology and Mycron Steel 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 Mycron Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Mycron Steel.
Diversification Opportunities for PMB Technology and Mycron Steel
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PMB and Mycron is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Mycron Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mycron Steel 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 Mycron Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mycron Steel Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Mycron Steel go up and down completely randomly.
Pair Corralation between PMB Technology and Mycron Steel
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Mycron Steel. But the stock apears to be less risky and, when comparing its historical volatility, PMB Technology Bhd is 1.37 times less risky than Mycron Steel. The stock trades about -0.06 of its potential returns per unit of risk. The Mycron Steel Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Mycron Steel Bhd on August 24, 2024 and sell it today you would lose (3.00) from holding Mycron Steel Bhd or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Mycron Steel Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| Mycron Steel Bhd |
PMB Technology and Mycron Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Mycron Steel
The main advantage of trading using opposite PMB Technology and Mycron Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Mycron Steel 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 Mycron Steel will offset losses from the drop in Mycron Steel's long position.| PMB Technology vs. Tex Cycle Technology | PMB Technology vs. Aeon Credit Service | PMB Technology vs. Public Bank Bhd | PMB Technology vs. Alliance Financial Group |
| Mycron Steel vs. Press Metal Bhd | Mycron Steel vs. PMB Technology Bhd | Mycron Steel vs. Pantech Group Holdings | Mycron Steel vs. CSC Steel Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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