Correlation Between PMB Technology and Choo Bee
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Choo Bee 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 PMB Technology and Choo Bee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PMB Technology Bhd and Choo Bee Metal, you can compare the effects of market volatilities on PMB Technology and Choo Bee 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 PMB Technology with a short position of Choo Bee. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Choo Bee.
Diversification Opportunities for PMB Technology and Choo Bee
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PMB and Choo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Choo Bee Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choo Bee Metal and PMB Technology 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 PMB Technology Bhd are associated (or correlated) with Choo Bee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choo Bee Metal has no effect on the direction of PMB Technology i.e., PMB Technology and Choo Bee go up and down completely randomly.
Pair Corralation between PMB Technology and Choo Bee
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Choo Bee. In addition to that, PMB Technology is 1.2 times more volatile than Choo Bee Metal. It trades about -0.06 of its total potential returns per unit of risk. Choo Bee Metal is currently generating about -0.02 per unit of volatility. If you would invest 95.00 in Choo Bee Metal on September 19, 2024 and sell it today you would lose (25.00) from holding Choo Bee Metal or give up 26.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
PMB Technology Bhd vs. Choo Bee Metal
Performance |
Timeline |
PMB Technology Bhd |
Choo Bee Metal |
PMB Technology and Choo Bee Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PMB Technology and Choo Bee
The main advantage of trading using opposite PMB Technology and Choo Bee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Choo Bee 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 Choo Bee will offset losses from the drop in Choo Bee's long position.PMB Technology vs. Press Metal Bhd | PMB Technology vs. Pantech Group Holdings | PMB Technology vs. Coraza Integrated Technology | PMB Technology vs. Southern Steel Bhd |
Choo Bee vs. Press Metal Bhd | Choo Bee vs. PMB Technology Bhd | Choo Bee vs. Pantech Group Holdings | Choo Bee vs. Coraza Integrated Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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