Correlation Between Sapura Industrial and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and PMB Technology 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 Sapura Industrial and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapura Industrial Bhd and PMB Technology Bhd, you can compare the effects of market volatilities on Sapura Industrial and PMB Technology 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 Sapura Industrial with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and PMB Technology.
Diversification Opportunities for Sapura Industrial and PMB Technology
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sapura and PMB is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology Bhd and Sapura Industrial 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 Sapura Industrial Bhd are associated (or correlated) with PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and PMB Technology go up and down completely randomly.
Pair Corralation between Sapura Industrial and PMB Technology
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 0.28 times more return on investment than PMB Technology. However, Sapura Industrial Bhd is 3.61 times less risky than PMB Technology. It trades about 0.15 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.05 per unit of risk. If you would invest 82.00 in Sapura Industrial Bhd on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Sapura Industrial Bhd or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. PMB Technology Bhd
Performance |
| Timeline |
| Sapura Industrial Bhd |
| PMB Technology Bhd |
Sapura Industrial and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and PMB Technology
The main advantage of trading using opposite Sapura Industrial and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, PMB Technology 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 PMB Technology will offset losses from the drop in PMB Technology's long position.| Sapura Industrial vs. Lyc Healthcare Bhd | Sapura Industrial vs. Apex Healthcare Bhd | Sapura Industrial vs. TAS Offshore Bhd | Sapura Industrial vs. Resintech Bhd |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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