Correlation Between PMB Technology and Hartalega Holdings
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Hartalega Holdings 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 Hartalega Holdings 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 Hartalega Holdings Bhd, you can compare the effects of market volatilities on PMB Technology and Hartalega Holdings 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 Hartalega Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Hartalega Holdings.
Diversification Opportunities for PMB Technology and Hartalega Holdings
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PMB and Hartalega is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Hartalega Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartalega Holdings 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 Hartalega Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartalega Holdings Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Hartalega Holdings go up and down completely randomly.
Pair Corralation between PMB Technology and Hartalega Holdings
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Hartalega Holdings. But the stock apears to be less risky and, when comparing its historical volatility, PMB Technology Bhd is 1.54 times less risky than Hartalega Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The Hartalega Holdings Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 184.00 in Hartalega Holdings Bhd on December 6, 2024 and sell it today you would earn a total of 39.00 from holding Hartalega Holdings Bhd or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Hartalega Holdings Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| Hartalega Holdings Bhd |
PMB Technology and Hartalega Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Hartalega Holdings
The main advantage of trading using opposite PMB Technology and Hartalega Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Hartalega Holdings 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 Hartalega Holdings will offset losses from the drop in Hartalega Holdings' long position.| PMB Technology vs. Press Metal Bhd | PMB Technology vs. YTL Hospitality REIT | PMB Technology vs. BP Plastics Holding | PMB Technology vs. Al Aqar Healthcare |
| Hartalega Holdings vs. Uchi Technologies Bhd | Hartalega Holdings vs. Choo Bee Metal | Hartalega Holdings vs. Apex Healthcare Bhd | Hartalega Holdings vs. Sunzen Biotech 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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