Correlation Between Press Metal and Melewar Industrial
Can any of the company-specific risk be diversified away by investing in both Press Metal and Melewar Industrial 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 Melewar Industrial 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 Melewar Industrial Group, you can compare the effects of market volatilities on Press Metal and Melewar Industrial 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 Melewar Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Melewar Industrial.
Diversification Opportunities for Press Metal and Melewar Industrial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Press and Melewar is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Melewar Industrial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melewar Industrial 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 Melewar Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melewar Industrial has no effect on the direction of Press Metal i.e., Press Metal and Melewar Industrial go up and down completely randomly.
Pair Corralation between Press Metal and Melewar Industrial
Assuming the 90 days trading horizon Press Metal Bhd is expected to generate 0.64 times more return on investment than Melewar Industrial. However, Press Metal Bhd is 1.55 times less risky than Melewar Industrial. It trades about 0.04 of its potential returns per unit of risk. Melewar Industrial Group is currently generating about -0.07 per unit of risk. If you would invest 483.00 in Press Metal Bhd on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Press Metal Bhd or generate 1.24% 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. Melewar Industrial Group
Performance |
| Timeline |
| Press Metal Bhd |
| Melewar Industrial |
Press Metal and Melewar Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Melewar Industrial
The main advantage of trading using opposite Press Metal and Melewar Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Melewar Industrial 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 Melewar Industrial will offset losses from the drop in Melewar Industrial's long position.| Press Metal vs. ONETECH SOLUTIONS HOLDINGS | Press Metal vs. Malayan Banking Bhd | Press Metal vs. Petronas Chemicals Group | Press Metal vs. Cloudpoint Technology Berhad |
| Melewar Industrial vs. Senheng New Retail | Melewar Industrial vs. Hong Leong Bank | Melewar Industrial vs. Farm Price Holdings | Melewar Industrial vs. Diversified Gateway Solutions |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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