Correlation Between Supercomnet Technologies and Mycron Steel
Can any of the company-specific risk be diversified away by investing in both Supercomnet Technologies and Mycron Steel 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 Supercomnet Technologies and Mycron Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercomnet Technologies Bhd and Mycron Steel Bhd, you can compare the effects of market volatilities on Supercomnet Technologies and Mycron Steel 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 Supercomnet Technologies with a short position of Mycron Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercomnet Technologies and Mycron Steel.
Diversification Opportunities for Supercomnet Technologies and Mycron Steel
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Supercomnet and Mycron is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Supercomnet Technologies Bhd and Mycron Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mycron Steel Bhd and Supercomnet Technologies 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 Supercomnet Technologies Bhd are associated (or correlated) with Mycron Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mycron Steel Bhd has no effect on the direction of Supercomnet Technologies i.e., Supercomnet Technologies and Mycron Steel go up and down completely randomly.
Pair Corralation between Supercomnet Technologies and Mycron Steel
Assuming the 90 days trading horizon Supercomnet Technologies Bhd is expected to under-perform the Mycron Steel. But the stock apears to be less risky and, when comparing its historical volatility, Supercomnet Technologies Bhd is 2.03 times less risky than Mycron Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Mycron Steel Bhd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Mycron Steel Bhd on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Mycron Steel Bhd or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Supercomnet Technologies Bhd vs. Mycron Steel Bhd
Performance |
| Timeline |
| Supercomnet Technologies |
| Mycron Steel Bhd |
Supercomnet Technologies and Mycron Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercomnet Technologies and Mycron Steel
The main advantage of trading using opposite Supercomnet Technologies and Mycron Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercomnet Technologies position performs unexpectedly, Mycron Steel 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 Mycron Steel will offset losses from the drop in Mycron Steel's long position.The idea behind Supercomnet Technologies Bhd and Mycron Steel 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.| Mycron Steel vs. Sunzen Biotech Bhd | Mycron Steel vs. Choo Bee Metal | Mycron Steel vs. Radiant Globaltech Bhd | Mycron Steel vs. Supercomnet Technologies Bhd |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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