Correlation Between Press Metal and Aeon Credit
Can any of the company-specific risk be diversified away by investing in both Press Metal and Aeon Credit 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 Aeon Credit 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 Aeon Credit Service, you can compare the effects of market volatilities on Press Metal and Aeon Credit 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 Aeon Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Aeon Credit.
Diversification Opportunities for Press Metal and Aeon Credit
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Press and Aeon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Aeon Credit Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Credit Service 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 Aeon Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Credit Service has no effect on the direction of Press Metal i.e., Press Metal and Aeon Credit go up and down completely randomly.
Pair Corralation between Press Metal and Aeon Credit
Assuming the 90 days trading horizon Press Metal is expected to generate 3.04 times less return on investment than Aeon Credit. In addition to that, Press Metal is 1.4 times more volatile than Aeon Credit Service. It trades about 0.01 of its total potential returns per unit of risk. Aeon Credit Service is currently generating about 0.03 per unit of volatility. If you would invest 594.00 in Aeon Credit Service on August 27, 2024 and sell it today you would earn a total of 86.00 from holding Aeon Credit Service or generate 14.48% 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. Aeon Credit Service
Performance |
| Timeline |
| Press Metal Bhd |
| Aeon Credit Service |
Press Metal and Aeon Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Aeon Credit
The main advantage of trading using opposite Press Metal and Aeon Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Aeon Credit 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 Aeon Credit will offset losses from the drop in Aeon Credit's long position.The idea behind Press Metal Bhd and Aeon Credit Service pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aeon Credit vs. Press Metal Bhd | Aeon Credit vs. Malayan Banking Bhd | Aeon Credit vs. Cengild Medical Berhad | Aeon Credit vs. Public Bank 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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