Correlation Between Pesona Metro and PESTECH International
Can any of the company-specific risk be diversified away by investing in both Pesona Metro and PESTECH International 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 Pesona Metro and PESTECH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pesona Metro Holdings and PESTECH International Bhd, you can compare the effects of market volatilities on Pesona Metro and PESTECH International 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 Pesona Metro with a short position of PESTECH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pesona Metro and PESTECH International.
Diversification Opportunities for Pesona Metro and PESTECH International
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pesona and PESTECH is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pesona Metro Holdings and PESTECH International Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PESTECH International Bhd and Pesona Metro 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 Pesona Metro Holdings are associated (or correlated) with PESTECH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PESTECH International Bhd has no effect on the direction of Pesona Metro i.e., Pesona Metro and PESTECH International go up and down completely randomly.
Pair Corralation between Pesona Metro and PESTECH International
Assuming the 90 days trading horizon Pesona Metro Holdings is expected to generate 0.67 times more return on investment than PESTECH International. However, Pesona Metro Holdings is 1.48 times less risky than PESTECH International. It trades about 0.1 of its potential returns per unit of risk. PESTECH International Bhd is currently generating about -0.01 per unit of risk. If you would invest 18.00 in Pesona Metro Holdings on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Pesona Metro Holdings or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pesona Metro Holdings vs. PESTECH International Bhd
Performance |
| Timeline |
| Pesona Metro Holdings |
| PESTECH International Bhd |
Pesona Metro and PESTECH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pesona Metro and PESTECH International
The main advantage of trading using opposite Pesona Metro and PESTECH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pesona Metro position performs unexpectedly, PESTECH International 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 PESTECH International will offset losses from the drop in PESTECH International's long position.| Pesona Metro vs. JAKS Resources Bhd | Pesona Metro vs. PESTECH International Bhd | Pesona Metro vs. Tadmax Resources Berhad |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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