Correlation Between Malpac Holdings and PMB Technology

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

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

Diversification Opportunities for Malpac Holdings and PMB Technology

-0.2

Correlation Coefficient

Malpac Holdings  PMB Technology

Good diversification

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

Pair Corralation between Malpac Holdings and PMB Technology

Assuming the 90 days trading horizon Malpac Holdings Bhd is expected to generate 1.09 times more return on investment than PMB Technology. However, Malpac Holdings is 1.09 times more volatile than PMB Technology Bhd. It trades about 0.01 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.34 per unit of risk. If you would invest  85.00  in Malpac Holdings Bhd on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Malpac Holdings Bhd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Malpac Holdings Bhd  vs.  PMB Technology Bhd

Malpac Holdings Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Malpac Holdings Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Malpac Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PMB Technology Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PMB 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 Malpac Holdings and PMB Technology

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

The idea behind Malpac Holdings Bhd and PMB 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 Global Correlations module to find global opportunities by holding instruments from different markets.