Correlation Between Press Metal and Bank Islam
Can any of the company-specific risk be diversified away by investing in both Press Metal and Bank Islam 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 Bank Islam 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 Bank Islam Malaysia, you can compare the effects of market volatilities on Press Metal and Bank Islam 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 Bank Islam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Bank Islam.
Diversification Opportunities for Press Metal and Bank Islam
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Press and Bank is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Bank Islam Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Islam Malaysia 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 Bank Islam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Islam Malaysia has no effect on the direction of Press Metal i.e., Press Metal and Bank Islam go up and down completely randomly.
Pair Corralation between Press Metal and Bank Islam
Assuming the 90 days trading horizon Press Metal Bhd is expected to under-perform the Bank Islam. In addition to that, Press Metal is 1.59 times more volatile than Bank Islam Malaysia. It trades about -0.27 of its total potential returns per unit of risk. Bank Islam Malaysia is currently generating about -0.09 per unit of volatility. If you would invest 253.00 in Bank Islam Malaysia on October 17, 2024 and sell it today you would lose (4.00) from holding Bank Islam Malaysia or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Bank Islam Malaysia
Performance |
| Timeline |
| Press Metal Bhd |
| Bank Islam Malaysia |
Press Metal and Bank Islam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Bank Islam
The main advantage of trading using opposite Press Metal and Bank Islam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Bank Islam 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 Bank Islam will offset losses from the drop in Bank Islam's long position.| Press Metal vs. Homeritz Bhd | Press Metal vs. Computer Forms Bhd | Press Metal vs. ES Ceramics Technology | Press Metal vs. YX Precious Metals |
| Bank Islam vs. Malayan Banking Bhd | Bank Islam vs. Public Bank Bhd | Bank Islam vs. Petronas Chemicals Group | Bank Islam vs. Tenaga Nasional 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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