Correlation Between PMB Technology and Aeon Credit
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Aeon Credit 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 Aeon Credit 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 Aeon Credit Service, you can compare the effects of market volatilities on PMB Technology and Aeon Credit 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 Aeon Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Aeon Credit.
Diversification Opportunities for PMB Technology and Aeon Credit
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PMB and Aeon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Aeon Credit Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Credit Service 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 Aeon Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Credit Service has no effect on the direction of PMB Technology i.e., PMB Technology and Aeon Credit go up and down completely randomly.
Pair Corralation between PMB Technology and Aeon Credit
Assuming the 90 days trading horizon PMB Technology Bhd is expected to generate 3.32 times more return on investment than Aeon Credit. However, PMB Technology is 3.32 times more volatile than Aeon Credit Service. It trades about 0.11 of its potential returns per unit of risk. Aeon Credit Service is currently generating about -0.45 per unit of risk. If you would invest 166.00 in PMB Technology Bhd on September 14, 2024 and sell it today you would earn a total of 12.00 from holding PMB Technology Bhd or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Aeon Credit Service
Performance |
| Timeline |
| PMB Technology Bhd |
| Aeon Credit Service |
PMB Technology and Aeon Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Aeon Credit
The main advantage of trading using opposite PMB Technology and Aeon Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Aeon Credit 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 Aeon Credit will offset losses from the drop in Aeon Credit's long position.| PMB Technology vs. MI Technovation Bhd | PMB Technology vs. YX Precious Metals | PMB Technology vs. K One Technology Bhd | PMB Technology vs. JF Technology BHD |
| Aeon Credit vs. Alliance Financial Group | Aeon Credit vs. Al Aqar Healthcare | Aeon Credit vs. PMB Technology Bhd | Aeon Credit 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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