Correlation Between Press Metal and Sunway Construction
Can any of the company-specific risk be diversified away by investing in both Press Metal and Sunway Construction 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 Construction 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 Construction Group, you can compare the effects of market volatilities on Press Metal and Sunway Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Sunway Construction.
Diversification Opportunities for Press Metal and Sunway Construction
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Press and Sunway is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Sunway Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Construction has no effect on the direction of Press Metal i.e., Press Metal and Sunway Construction go up and down completely randomly.
Pair Corralation between Press Metal and Sunway Construction
Assuming the 90 days trading horizon Press Metal is expected to generate 20.95 times less return on investment than Sunway Construction. But when comparing it to its historical volatility, Press Metal Bhd is 1.29 times less risky than Sunway Construction. It trades about 0.01 of its potential returns per unit of risk. Sunway Construction Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Sunway Construction Group on August 28, 2024 and sell it today you would earn a total of 305.00 from holding Sunway Construction Group or generate 210.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Sunway Construction Group
Performance |
| Timeline |
| Press Metal Bhd |
| Sunway Construction |
Press Metal and Sunway Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Sunway Construction
The main advantage of trading using opposite Press Metal and Sunway Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Sunway Construction 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 Construction will offset losses from the drop in Sunway Construction's long position.The idea behind Press Metal Bhd and Sunway Construction Group 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.| Sunway Construction vs. Cloudpoint Technology Berhad | Sunway Construction vs. ES Ceramics Technology | Sunway Construction vs. Privasia Technology Bhd | Sunway Construction vs. Computer Forms 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |