Correlation Between Press Metal and Asian Pac
Can any of the company-specific risk be diversified away by investing in both Press Metal and Asian Pac 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 Asian Pac 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 Asian Pac Holdings, you can compare the effects of market volatilities on Press Metal and Asian Pac 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 Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Asian Pac.
Diversification Opportunities for Press Metal and Asian Pac
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Press and Asian is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings 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 Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Press Metal i.e., Press Metal and Asian Pac go up and down completely randomly.
Pair Corralation between Press Metal and Asian Pac
Assuming the 90 days trading horizon Press Metal Bhd is expected to generate 0.4 times more return on investment than Asian Pac. However, Press Metal Bhd is 2.53 times less risky than Asian Pac. It trades about 0.03 of its potential returns per unit of risk. Asian Pac Holdings is currently generating about -0.09 per unit of risk. If you would invest 485.00 in Press Metal Bhd on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Press Metal Bhd or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Asian Pac Holdings
Performance |
| Timeline |
| Press Metal Bhd |
| Asian Pac Holdings |
Press Metal and Asian Pac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Asian Pac
The main advantage of trading using opposite Press Metal and Asian Pac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Asian Pac 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 Asian Pac will offset losses from the drop in Asian Pac's long position.| Press Metal vs. Pantech Group Holdings | Press Metal vs. Resintech Bhd | Press Metal vs. Supercomnet Technologies Bhd | Press Metal vs. Cosmos Technology International |
| Asian Pac vs. Dataprep Holdings Bhd | Asian Pac vs. Computer Forms Bhd | Asian Pac vs. Farm Price Holdings | Asian Pac vs. Datasonic Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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