Correlation Between Press Metal and Shangri La
Can any of the company-specific risk be diversified away by investing in both Press Metal and Shangri La 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 Shangri La 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 Shangri La Hotels, you can compare the effects of market volatilities on Press Metal and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Shangri La.
Diversification Opportunities for Press Metal and Shangri La
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Press and Shangri is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of Press Metal i.e., Press Metal and Shangri La go up and down completely randomly.
Pair Corralation between Press Metal and Shangri La
Assuming the 90 days trading horizon Press Metal Bhd is expected to generate 1.84 times more return on investment than Shangri La. However, Press Metal is 1.84 times more volatile than Shangri La Hotels. It trades about 0.04 of its potential returns per unit of risk. Shangri La Hotels is currently generating about 0.0 per unit of risk. If you would invest 489.00 in Press Metal Bhd on September 15, 2024 and sell it today you would earn a total of 16.00 from holding Press Metal Bhd or generate 3.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Press Metal Bhd vs. Shangri La Hotels
Performance |
Timeline |
Press Metal Bhd |
Shangri La Hotels |
Press Metal and Shangri La Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Press Metal and Shangri La
The main advantage of trading using opposite Press Metal and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.Press Metal vs. PMB Technology Bhd | Press Metal vs. Pantech Group Holdings | Press Metal vs. CSC Steel Holdings | Press Metal vs. Coraza Integrated Technology |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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