Correlation Between PMB Technology and Awanbiru Technology
Can any of the company-specific risk be diversified away by investing in both PMB Technology and Awanbiru 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 PMB Technology and Awanbiru Technology 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 Awanbiru Technology Bhd, you can compare the effects of market volatilities on PMB Technology and Awanbiru 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 PMB Technology with a short position of Awanbiru Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PMB Technology and Awanbiru Technology.
Diversification Opportunities for PMB Technology and Awanbiru Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PMB and Awanbiru is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and Awanbiru Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awanbiru Technology Bhd 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 Awanbiru Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awanbiru Technology Bhd has no effect on the direction of PMB Technology i.e., PMB Technology and Awanbiru Technology go up and down completely randomly.
Pair Corralation between PMB Technology and Awanbiru Technology
Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the Awanbiru Technology. In addition to that, PMB Technology is 1.08 times more volatile than Awanbiru Technology Bhd. It trades about -0.12 of its total potential returns per unit of risk. Awanbiru Technology Bhd is currently generating about 0.01 per unit of volatility. If you would invest 35.00 in Awanbiru Technology Bhd on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Awanbiru Technology Bhd or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PMB Technology Bhd vs. Awanbiru Technology Bhd
Performance |
Timeline |
PMB Technology Bhd |
Awanbiru Technology Bhd |
PMB Technology and Awanbiru Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PMB Technology and Awanbiru Technology
The main advantage of trading using opposite PMB Technology and Awanbiru Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, Awanbiru 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 Awanbiru Technology will offset losses from the drop in Awanbiru Technology's long position.PMB Technology vs. Kossan Rubber Industries | PMB Technology vs. Computer Forms Bhd | PMB Technology vs. Sungei Bagan Rubber | PMB Technology vs. Riverview Rubber Estates |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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