Correlation Between PMB Technology and Senheng New
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on PMB Technology and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Senheng New.
Diversification Opportunities for PMB Technology and Senheng New
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PMB and Senheng is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of PMB Technology i.e., PMB Technology and Senheng New go up and down completely randomly.
Pair Corralation between PMB Technology and Senheng New
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Senheng New. In addition to that, PMB Technology is 3.04 times more volatile than Senheng New Retail. It trades about -0.02 of its total potential returns per unit of risk. Senheng New Retail is currently generating about 0.01 per unit of volatility. If you would invest 24.00 in Senheng New Retail on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Senheng New Retail or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PMB Technology Bhd vs. Senheng New Retail
Performance |
| Timeline |
| PMB Technology Bhd |
| Senheng New Retail |
PMB Technology and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Senheng New
The main advantage of trading using opposite PMB Technology and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| PMB Technology vs. Press Metal Bhd | PMB Technology vs. Eonmetall Group Bhd | PMB Technology vs. Mycron Steel Bhd |
| Senheng New vs. PMB Technology Bhd | Senheng New vs. Press Metal Bhd | Senheng New vs. YX Precious Metals | Senheng New vs. CPE Technology Berhad |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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