Correlation Between PMB Technology and Al Aqar
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Al Aqar 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 Al Aqar 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 Al Aqar Healthcare, you can compare the effects of market volatilities on PMB Technology and Al Aqar 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 Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Al Aqar.
Diversification Opportunities for PMB Technology and Al Aqar
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PMB and 5116 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare 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 Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of PMB Technology i.e., PMB Technology and Al Aqar go up and down completely randomly.
Pair Corralation between PMB Technology and Al Aqar
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Al Aqar. In addition to that, PMB Technology is 1.12 times more volatile than Al Aqar Healthcare. It trades about -0.24 of its total potential returns per unit of risk. Al Aqar Healthcare is currently generating about -0.21 per unit of volatility. If you would invest 136.00 in Al Aqar Healthcare on November 2, 2024 and sell it today you would lose (6.00) from holding Al Aqar Healthcare or give up 4.41% 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. Al Aqar Healthcare
Performance |
| Timeline |
| PMB Technology Bhd |
| Al Aqar Healthcare |
PMB Technology and Al Aqar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Al Aqar
The main advantage of trading using opposite PMB Technology and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.| PMB Technology vs. Steel Hawk Berhad | PMB Technology vs. Leader Steel Holdings | PMB Technology vs. Dataprep Holdings Bhd | PMB Technology vs. Choo Bee Metal |
| Al Aqar vs. Awanbiru Technology Bhd | Al Aqar vs. Public Bank Bhd | Al Aqar vs. Malayan Banking Bhd | Al Aqar vs. Bank Islam Malaysia |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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