Correlation Between K One and CSC Steel
Can any of the company-specific risk be diversified away by investing in both K One and CSC 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 K One and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K One Technology Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on K One and CSC 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 K One with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of K One and CSC Steel.
Diversification Opportunities for K One and CSC Steel
Poor diversification
The 3 months correlation between 0111 and CSC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding K One Technology Bhd and CSC Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSC Steel Holdings and K One 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 K One Technology Bhd are associated (or correlated) with CSC Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSC Steel Holdings has no effect on the direction of K One i.e., K One and CSC Steel go up and down completely randomly.
Pair Corralation between K One and CSC Steel
Assuming the 90 days trading horizon K One Technology Bhd is expected to generate 3.85 times more return on investment than CSC Steel. However, K One is 3.85 times more volatile than CSC Steel Holdings. It trades about 0.04 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about 0.03 per unit of risk. If you would invest 14.00 in K One Technology Bhd on September 2, 2024 and sell it today you would earn a total of 3.00 from holding K One Technology Bhd or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K One Technology Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| K One Technology |
| CSC Steel Holdings |
K One and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K One and CSC Steel
The main advantage of trading using opposite K One and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K One position performs unexpectedly, CSC 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 CSC Steel will offset losses from the drop in CSC Steel's long position.| K One vs. Hong Leong Bank | K One vs. Sports Toto Berhad | K One vs. Sungei Bagan Rubber | K One vs. Lyc Healthcare Bhd |
| CSC Steel vs. Pantech Group Holdings | CSC Steel vs. Coraza Integrated Technology | CSC Steel vs. Eonmetall Group 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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