Correlation Between PMB Technology and MI Technovation
Can any of the company-specific risk be diversified away by investing in both PMB Technology and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on PMB Technology and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and MI Technovation.
Diversification Opportunities for PMB Technology and MI Technovation
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PMB and 5286 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and MI Technovation go up and down completely randomly.
Pair Corralation between PMB Technology and MI Technovation
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the MI Technovation. But the stock apears to be less risky and, when comparing its historical volatility, PMB Technology Bhd is 1.03 times less risky than MI Technovation. The stock trades about -0.07 of its potential returns per unit of risk. The MI Technovation Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 128.00 in MI Technovation Bhd on August 31, 2024 and sell it today you would earn a total of 82.00 from holding MI Technovation Bhd or generate 64.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. MI Technovation Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| MI Technovation Bhd |
PMB Technology and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and MI Technovation
The main advantage of trading using opposite PMB Technology and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| PMB Technology vs. Pantech Group Holdings | PMB Technology vs. Coraza Integrated Technology | PMB Technology vs. Choo Bee Metal | PMB Technology vs. Eonmetall Group Bhd |
| MI Technovation vs. British American Tobacco | MI Technovation vs. Hong Leong Bank | MI Technovation vs. Daya Materials Bhd | MI Technovation vs. Aeon Credit Service |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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