Correlation Between PMB Technology and Star Media
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Star Media 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 Star Media 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 Star Media Group, you can compare the effects of market volatilities on PMB Technology and Star Media 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 Star Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Star Media.
Diversification Opportunities for PMB Technology and Star Media
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PMB and Star is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Star Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Media Group 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 Star Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Media Group has no effect on the direction of PMB Technology i.e., PMB Technology and Star Media go up and down completely randomly.
Pair Corralation between PMB Technology and Star Media
Assuming the 90 days trading horizon PMB Technology is expected to generate 7.05 times less return on investment than Star Media. In addition to that, PMB Technology is 2.23 times more volatile than Star Media Group. It trades about 0.0 of its total potential returns per unit of risk. Star Media Group is currently generating about 0.08 per unit of volatility. If you would invest 40.00 in Star Media Group on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Star Media Group or generate 2.5% 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. Star Media Group
Performance |
| Timeline |
| PMB Technology Bhd |
| Star Media Group |
PMB Technology and Star Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Star Media
The main advantage of trading using opposite PMB Technology and Star Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Star Media 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 Star Media will offset losses from the drop in Star Media's long position.The idea behind PMB Technology Bhd and Star Media Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Star Media vs. Malaysia Steel Works | Star Media vs. Apex Healthcare Bhd | Star Media vs. Nova Wellness Group | Star Media vs. Central Industrial Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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