Correlation Between PMB Technology and Shangri La
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Shangri La 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 Shangri La 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 Shangri La Hotels, you can compare the effects of market volatilities on PMB Technology and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Shangri La.
Diversification Opportunities for PMB Technology and Shangri La
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between PMB and Shangri is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of PMB Technology i.e., PMB Technology and Shangri La go up and down completely randomly.
Pair Corralation between PMB Technology and Shangri La
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Shangri La. In addition to that, PMB Technology is 1.41 times more volatile than Shangri La Hotels. It trades about -0.07 of its total potential returns per unit of risk. Shangri La Hotels is currently generating about -0.03 per unit of volatility. If you would invest 249.00 in Shangri La Hotels on September 12, 2024 and sell it today you would lose (49.00) from holding Shangri La Hotels or give up 19.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Shangri La Hotels
Performance |
| Timeline |
| PMB Technology Bhd |
| Shangri La Hotels |
PMB Technology and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Shangri La
The main advantage of trading using opposite PMB Technology and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| PMB Technology vs. Press Metal Bhd | PMB Technology vs. Pantech Group Holdings | PMB Technology vs. CSC Steel Holdings | PMB Technology vs. Coraza Integrated Technology |
| Shangri La vs. Berjaya Food Bhd | Shangri La vs. ECM Libra Financial | Shangri La vs. Al Aqar Healthcare | Shangri La vs. PMB Technology 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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