Correlation Between Press Metal and Datasonic Group
Can any of the company-specific risk be diversified away by investing in both Press Metal and Datasonic Group 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 Datasonic Group 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 Datasonic Group Bhd, you can compare the effects of market volatilities on Press Metal and Datasonic Group 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 Datasonic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Datasonic Group.
Diversification Opportunities for Press Metal and Datasonic Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Press and Datasonic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Datasonic Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datasonic Group 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 Datasonic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datasonic Group Bhd has no effect on the direction of Press Metal i.e., Press Metal and Datasonic Group go up and down completely randomly.
Pair Corralation between Press Metal and Datasonic Group
Assuming the 90 days trading horizon Press Metal Bhd is expected to generate 1.0 times more return on investment than Datasonic Group. However, Press Metal is 1.0 times more volatile than Datasonic Group Bhd. It trades about 0.02 of its potential returns per unit of risk. Datasonic Group Bhd is currently generating about -0.04 per unit of risk. If you would invest 473.00 in Press Metal Bhd on November 3, 2024 and sell it today you would earn a total of 16.00 from holding Press Metal Bhd or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Datasonic Group Bhd
Performance |
| Timeline |
| Press Metal Bhd |
| Datasonic Group Bhd |
Press Metal and Datasonic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Datasonic Group
The main advantage of trading using opposite Press Metal and Datasonic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Datasonic Group 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 Datasonic Group will offset losses from the drop in Datasonic Group's long position.| Press Metal vs. KPJ Healthcare Bhd | Press Metal vs. RHB Bank Bhd | Press Metal vs. Rubberex M | Press Metal vs. Alliance Financial Group |
| Datasonic Group vs. Resintech Bhd | Datasonic Group vs. Oriental Food Industries | Datasonic Group vs. Bank Islam Malaysia | Datasonic Group vs. Kawan Food 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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