Correlation Between PMB Technology and Minetech Resources
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Minetech 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 Minetech 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 Minetech Resources Bhd, you can compare the effects of market volatilities on PMB Technology and Minetech 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 Minetech Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Minetech Resources.
Diversification Opportunities for PMB Technology and Minetech Resources
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PMB and Minetech is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Minetech Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minetech 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 Minetech Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minetech Resources Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Minetech Resources go up and down completely randomly.
Pair Corralation between PMB Technology and Minetech Resources
Assuming the 90 days trading horizon PMB Technology Bhd is expected to generate 0.92 times more return on investment than Minetech Resources. However, PMB Technology Bhd is 1.08 times less risky than Minetech Resources. It trades about 0.07 of its potential returns per unit of risk. Minetech Resources Bhd is currently generating about -0.16 per unit of risk. If you would invest 171.00 in PMB Technology Bhd on September 13, 2024 and sell it today you would earn a total of 7.00 from holding PMB Technology Bhd or generate 4.09% 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. Minetech Resources Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| Minetech Resources Bhd |
PMB Technology and Minetech Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Minetech Resources
The main advantage of trading using opposite PMB Technology and Minetech Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Minetech 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 Minetech Resources will offset losses from the drop in Minetech Resources' long position.| PMB Technology vs. MI Technovation Bhd | PMB Technology vs. YX Precious Metals | PMB Technology vs. K One Technology Bhd | PMB Technology vs. JF Technology BHD |
| Minetech Resources vs. Genetec Technology Bhd | Minetech Resources vs. Nexgram Holdings Bhd | Minetech Resources vs. Digistar Bhd | Minetech Resources vs. AirAsia X 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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