Correlation Between Public Packages and PIE Industrial

Can any of the company-specific risk be diversified away by investing in both Public Packages and PIE Industrial 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 Public Packages and PIE Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Public Packages and PIE Industrial

0.3

Correlation Coefficient

Public Packages  PIE Industrial

Weak diversification

The 3 months correlation between Public and PIE is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Public Packages Holdings and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial Bhd and Public Packages 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 Public Packages Holdings are associated (or correlated) with PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of Public Packages i.e., Public Packages and PIE Industrial go up and down completely randomly.

Pair Corralation between Public Packages and PIE Industrial

Assuming the 90 days trading horizon Public Packages is expected to generate 1.03 times less return on investment than PIE Industrial. But when comparing it to its historical volatility, Public Packages Holdings is 1.26 times less risky than PIE Industrial. It trades about 0.18 of its potential returns per unit of risk. PIE Industrial Bhd is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  588.00  in PIE Industrial Bhd on September 24, 2024 and sell it today you would earn a total of  23.00  from holding PIE Industrial Bhd or generate 3.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Public Packages Holdings  vs.  PIE Industrial Bhd

Public Packages Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Public Packages Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Public Packages is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PIE Industrial Bhd

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PIE Industrial Bhd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, PIE Industrial disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Public Packages and PIE Industrial

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

The idea behind Public Packages Holdings and PIE Industrial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.