Correlation Between PIE Industrial and Globetronics Tech

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

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

Diversification Opportunities for PIE Industrial and Globetronics Tech

0.9

Correlation Coefficient

PIE Industrial  Globetronics Tech

Almost no diversification

The 3 months correlation between PIE and Globetronics is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd and Globetronics Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globetronics Tech Bhd and PIE Industrial 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 PIE Industrial Bhd are associated (or correlated) with Globetronics Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globetronics Tech Bhd has no effect on the direction of PIE Industrial i.e., PIE Industrial and Globetronics Tech go up and down completely randomly.

Pair Corralation between PIE Industrial and Globetronics Tech

Assuming the 90 days trading horizon PIE Industrial Bhd is expected to under-perform the Globetronics Tech. In addition to that, PIE Industrial is 1.33 times more volatile than Globetronics Tech Bhd. It trades about -0.17 of its total potential returns per unit of risk. Globetronics Tech Bhd is currently generating about -0.21 per unit of volatility. If you would invest  61.00  in Globetronics Tech Bhd on December 25, 2024 and sell it today you would lose (18.00) from holding Globetronics Tech Bhd or give up 29.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.31%
Values	Daily Returns

PIE Industrial Bhd  vs.  Globetronics Tech Bhd

PIE Industrial Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days PIE Industrial Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Globetronics Tech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globetronics Tech Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PIE Industrial and Globetronics Tech

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

The idea behind PIE Industrial Bhd and Globetronics Tech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.