Correlation Between PMB Technology and QL Resources
Can any of the company-specific risk be diversified away by investing in both PMB Technology and QL Resources 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 QL Resources 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 QL Resources Bhd, you can compare the effects of market volatilities on PMB Technology and QL Resources 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 QL Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and QL Resources.
Diversification Opportunities for PMB Technology and QL Resources
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PMB and 7084 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and QL Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QL Resources 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 QL Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QL Resources Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and QL Resources go up and down completely randomly.
Pair Corralation between PMB Technology and QL Resources
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the QL Resources. In addition to that, PMB Technology is 2.55 times more volatile than QL Resources Bhd. It trades about -0.06 of its total potential returns per unit of risk. QL Resources Bhd is currently generating about 0.07 per unit of volatility. If you would invest 360.00 in QL Resources Bhd on September 3, 2024 and sell it today you would earn a total of 129.00 from holding QL Resources Bhd or generate 35.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. QL Resources Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| QL Resources Bhd |
PMB Technology and QL Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and QL Resources
The main advantage of trading using opposite PMB Technology and QL Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, QL Resources 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 QL Resources will offset losses from the drop in QL Resources' long position.| PMB Technology vs. Press Metal Bhd | PMB Technology vs. Malaysia Steel Works | PMB Technology vs. Choo Bee Metal | PMB Technology vs. Eonmetall Group Bhd |
| QL Resources vs. Al Aqar Healthcare | QL Resources vs. PMB Technology Bhd | QL Resources vs. Icon Offshore Bhd | QL Resources vs. JF 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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