Correlation Between Public Bank and Sand Nisko

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

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

Diversification Opportunities for Public Bank and Sand Nisko

0.2

Correlation Coefficient

Public Bank  Sand Nisko

Modest diversification

The 3 months correlation between Public and Sand is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank Bhd and Sand Nisko Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sand Nisko Capital and Public Bank 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 Bank Bhd are associated (or correlated) with Sand Nisko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sand Nisko Capital has no effect on the direction of Public Bank i.e., Public Bank and Sand Nisko go up and down completely randomly.

Pair Corralation between Public Bank and Sand Nisko

Assuming the 90 days trading horizon Public Bank is expected to generate 167.32 times less return on investment than Sand Nisko. But when comparing it to its historical volatility, Public Bank Bhd is 38.21 times less risky than Sand Nisko. It trades about 0.03 of its potential returns per unit of risk. Sand Nisko Capital is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Sand Nisko Capital on September 20, 2024 and sell it today you would lose (28.00) from holding Sand Nisko Capital or give up 73.68% of portfolio value over 90 days.

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

Public Bank Bhd  vs.  Sand Nisko Capital

Public Bank Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sand Nisko Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sand Nisko Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Sand Nisko disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Public Bank and Sand Nisko

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

The idea behind Public Bank Bhd and Sand Nisko Capital 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.