Correlation Between Pentamaster Bhd and MQ Technology

Can any of the company-specific risk be diversified away by investing in both Pentamaster Bhd and MQ Technology 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 Pentamaster Bhd and MQ Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pentamaster Bhd and MQ Technology Bhd, you can compare the effects of market volatilities on Pentamaster Bhd and MQ Technology 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 Pentamaster Bhd with a short position of MQ Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentamaster Bhd and MQ Technology.

Diversification Opportunities for Pentamaster Bhd and MQ Technology

-0.51

Correlation Coefficient

Pentamaster Bhd  MQ Technology

Excellent diversification

The 3 months correlation between Pentamaster and 0070 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pentamaster Bhd and MQ Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQ Technology Bhd and Pentamaster Bhd 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 Pentamaster Bhd are associated (or correlated) with MQ Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQ Technology Bhd has no effect on the direction of Pentamaster Bhd i.e., Pentamaster Bhd and MQ Technology go up and down completely randomly.

Pair Corralation between Pentamaster Bhd and MQ Technology

Assuming the 90 days trading horizon Pentamaster Bhd is expected to generate 0.66 times more return on investment than MQ Technology. However, Pentamaster Bhd is 1.52 times less risky than MQ Technology. It trades about 0.11 of its potential returns per unit of risk. MQ Technology Bhd is currently generating about -0.04 per unit of risk. If you would invest  339.00  in Pentamaster Bhd on September 26, 2024 and sell it today you would earn a total of  66.00  from holding Pentamaster Bhd or generate 19.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Pentamaster Bhd  vs.  MQ Technology Bhd

Pentamaster Bhd

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pentamaster Bhd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Pentamaster Bhd disclosed solid returns over the last few months and may actually be approaching a breakup point.

MQ Technology Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MQ Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Pentamaster Bhd and MQ Technology

The main advantage of trading using opposite Pentamaster Bhd and MQ Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentamaster Bhd position performs unexpectedly, MQ Technology 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 MQ Technology will offset losses from the drop in MQ Technology's long position.

The idea behind Pentamaster Bhd and MQ Technology Bhd 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.