Correlation Between Press Metal and Batu Kawan
Can any of the company-specific risk be diversified away by investing in both Press Metal and Batu Kawan 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 Press Metal and Batu Kawan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Press Metal Bhd and Batu Kawan Bhd, you can compare the effects of market volatilities on Press Metal and Batu Kawan 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 Press Metal with a short position of Batu Kawan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Batu Kawan.
Diversification Opportunities for Press Metal and Batu Kawan
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Press and Batu is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Batu Kawan Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batu Kawan Bhd and Press Metal 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 Press Metal Bhd are associated (or correlated) with Batu Kawan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batu Kawan Bhd has no effect on the direction of Press Metal i.e., Press Metal and Batu Kawan go up and down completely randomly.
Pair Corralation between Press Metal and Batu Kawan
Assuming the 90 days trading horizon Press Metal Bhd is expected to under-perform the Batu Kawan. In addition to that, Press Metal is 4.92 times more volatile than Batu Kawan Bhd. It trades about -0.04 of its total potential returns per unit of risk. Batu Kawan Bhd is currently generating about 0.03 per unit of volatility. If you would invest 1,980 in Batu Kawan Bhd on August 24, 2024 and sell it today you would earn a total of 34.00 from holding Batu Kawan Bhd or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Batu Kawan Bhd
Performance |
| Timeline |
| Press Metal Bhd |
| Batu Kawan Bhd |
Press Metal and Batu Kawan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Batu Kawan
The main advantage of trading using opposite Press Metal and Batu Kawan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Batu Kawan 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 Batu Kawan will offset losses from the drop in Batu Kawan's long position.| Press Metal vs. Farm Price Holdings | Press Metal vs. BP Plastics Holding | Press Metal vs. Apollo Food Holdings | Press Metal vs. Sports Toto Berhad |
| Batu Kawan vs. YX Precious Metals | Batu Kawan vs. Computer Forms Bhd | Batu Kawan vs. Uchi Technologies Bhd | Batu Kawan vs. TAS Offshore 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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