Correlation Between MyTech Group and Press Metal
Can any of the company-specific risk be diversified away by investing in both MyTech Group and Press Metal 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 MyTech Group and Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MyTech Group Bhd and Press Metal Bhd, you can compare the effects of market volatilities on MyTech Group and Press Metal 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 MyTech Group with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MyTech Group and Press Metal.
Diversification Opportunities for MyTech Group and Press Metal
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between MyTech and Press is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding MyTech Group Bhd and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal Bhd and MyTech Group 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 MyTech Group Bhd are associated (or correlated) with Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of MyTech Group i.e., MyTech Group and Press Metal go up and down completely randomly.
Pair Corralation between MyTech Group and Press Metal
Assuming the 90 days trading horizon MyTech Group Bhd is expected to under-perform the Press Metal. But the stock apears to be less risky and, when comparing its historical volatility, MyTech Group Bhd is 1.79 times less risky than Press Metal. The stock trades about -0.32 of its potential returns per unit of risk. The Press Metal Bhd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Press Metal Bhd on August 29, 2024 and sell it today you would lose (5.00) from holding Press Metal Bhd or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MyTech Group Bhd vs. Press Metal Bhd
Performance |
| Timeline |
| MyTech Group Bhd |
| Press Metal Bhd |
MyTech Group and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MyTech Group and Press Metal
The main advantage of trading using opposite MyTech Group and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MyTech Group position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.The idea behind MyTech Group Bhd and Press Metal Bhd 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.| Press Metal vs. KPJ Healthcare Bhd | Press Metal vs. PIE Industrial Bhd | Press Metal vs. Icon Offshore Bhd | Press Metal 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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