Correlation Between PMB Technology and Kamdar Group
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Kamdar Group 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 Kamdar Group 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 Kamdar Group Bhd, you can compare the effects of market volatilities on PMB Technology and Kamdar Group 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 Kamdar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Kamdar Group.
Diversification Opportunities for PMB Technology and Kamdar Group
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PMB and Kamdar is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Kamdar Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamdar Group 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 Kamdar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamdar Group Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Kamdar Group go up and down completely randomly.
Pair Corralation between PMB Technology and Kamdar Group
Assuming the 90 days trading horizon PMB Technology is expected to generate 3.62 times less return on investment than Kamdar Group. But when comparing it to its historical volatility, PMB Technology Bhd is 1.32 times less risky than Kamdar Group. It trades about 0.1 of its potential returns per unit of risk. Kamdar Group Bhd is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Kamdar Group Bhd on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Kamdar Group Bhd or generate 28.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PMB Technology Bhd vs. Kamdar Group Bhd
Performance |
| Timeline |
| PMB Technology Bhd |
| Kamdar Group Bhd |
PMB Technology and Kamdar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PMB Technology and Kamdar Group
The main advantage of trading using opposite PMB Technology and Kamdar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Kamdar Group 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 Kamdar Group will offset losses from the drop in Kamdar Group'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 |
| Kamdar Group vs. Cloudpoint Technology Berhad | Kamdar Group vs. Apollo Food Holdings | Kamdar Group vs. Carlsberg Brewery Malaysia | Kamdar Group vs. Riverview Rubber Estates |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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