Correlation Between Press Metal and TAS Offshore

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

Diversification Opportunities for Press Metal and TAS Offshore

-0.22

Correlation Coefficient

Press Metal  TAS Offshore

Very good diversification

The 3 months correlation between Press and TAS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal Bhd and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd 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 TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Press Metal i.e., Press Metal and TAS Offshore go up and down completely randomly.

Pair Corralation between Press Metal and TAS Offshore

Assuming the 90 days trading horizon Press Metal is expected to generate 70.63 times less return on investment than TAS Offshore. But when comparing it to its historical volatility, Press Metal Bhd is 2.59 times less risky than TAS Offshore. It trades about 0.0 of its potential returns per unit of risk. TAS Offshore Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  25.00  in TAS Offshore Bhd on October 25, 2024 and sell it today you would earn a total of  43.00  from holding TAS Offshore Bhd or generate 172.0% return on investment over 90 days.

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

Press Metal Bhd  vs.  TAS Offshore Bhd

Press Metal Bhd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Press Metal Bhd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Press Metal is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

TAS Offshore Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TAS Offshore Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 Press Metal and TAS Offshore

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

The idea behind Press Metal Bhd and TAS Offshore 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.