Correlation Between Public Packages and MI Technovation

Can any of the company-specific risk be diversified away by investing in both Public Packages and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on Public Packages and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Packages and MI Technovation.

Diversification Opportunities for Public Packages and MI Technovation

0.02

Correlation Coefficient

Public Packages  MI Technovation

Significant diversification

The 3 months correlation between Public and 5286 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Public Packages Holdings and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Public Packages i.e., Public Packages and MI Technovation go up and down completely randomly.

Pair Corralation between Public Packages and MI Technovation

Assuming the 90 days trading horizon Public Packages Holdings is expected to under-perform the MI Technovation. But the stock apears to be less risky and, when comparing its historical volatility, Public Packages Holdings is 1.8 times less risky than MI Technovation. The stock trades about -0.1 of its potential returns per unit of risk. The MI Technovation Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  198.00  in MI Technovation Bhd on September 3, 2024 and sell it today you would earn a total of  12.00  from holding MI Technovation Bhd or generate 6.06% return on investment over 90 days.

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

Public Packages Holdings  vs.  MI Technovation 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 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.

MI Technovation Bhd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MI Technovation Bhd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, MI Technovation may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Public Packages and MI Technovation

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

The idea behind Public Packages Holdings and MI Technovation 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.