Correlation Between Press Metal and Sunway Bhd
Can any of the company-specific risk be diversified away by investing in both Press Metal and Sunway Bhd 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 Sunway Bhd 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 Sunway Bhd, you can compare the effects of market volatilities on Press Metal and Sunway Bhd 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 Sunway Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Sunway Bhd.
Diversification Opportunities for Press Metal and Sunway Bhd
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Press and Sunway is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Sunway Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway 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 Sunway Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Bhd has no effect on the direction of Press Metal i.e., Press Metal and Sunway Bhd go up and down completely randomly.
Pair Corralation between Press Metal and Sunway Bhd
Assuming the 90 days trading horizon Press Metal Bhd is expected to under-perform the Sunway Bhd. In addition to that, Press Metal is 1.89 times more volatile than Sunway Bhd. It trades about -0.01 of its total potential returns per unit of risk. Sunway Bhd is currently generating about 0.41 per unit of volatility. If you would invest 434.00 in Sunway Bhd on August 30, 2024 and sell it today you would earn a total of 51.00 from holding Sunway Bhd or generate 11.75% 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. Sunway Bhd
Performance |
| Timeline |
| Press Metal Bhd |
| Sunway Bhd |
Press Metal and Sunway Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Sunway Bhd
The main advantage of trading using opposite Press Metal and Sunway Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Sunway Bhd 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 Sunway Bhd will offset losses from the drop in Sunway Bhd's long position.| Press Metal vs. Diversified Gateway Solutions | Press Metal vs. YX Precious Metals | Press Metal vs. K One Technology Bhd | Press Metal vs. Computer Forms Bhd |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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