Correlation Between Greatech Technology and Southern Steel
Can any of the company-specific risk be diversified away by investing in both Greatech Technology and Southern 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 Greatech Technology and Southern Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatech Technology Bhd and Southern Steel Bhd, you can compare the effects of market volatilities on Greatech Technology and Southern 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 Greatech Technology with a short position of Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatech Technology and Southern Steel.
Diversification Opportunities for Greatech Technology and Southern Steel
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greatech and Southern is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Greatech Technology Bhd and Southern Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Steel Bhd and Greatech Technology 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 Greatech Technology Bhd are associated (or correlated) with Southern Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Steel Bhd has no effect on the direction of Greatech Technology i.e., Greatech Technology and Southern Steel go up and down completely randomly.
Pair Corralation between Greatech Technology and Southern Steel
Assuming the 90 days trading horizon Greatech Technology Bhd is expected to under-perform the Southern Steel. But the stock apears to be less risky and, when comparing its historical volatility, Greatech Technology Bhd is 1.17 times less risky than Southern Steel. The stock trades about -0.16 of its potential returns per unit of risk. The Southern Steel Bhd is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Southern Steel Bhd on October 22, 2024 and sell it today you would lose (1.00) from holding Southern Steel Bhd or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatech Technology Bhd vs. Southern Steel Bhd
Performance |
| Timeline |
| Greatech Technology Bhd |
| Southern Steel Bhd |
Greatech Technology and Southern Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatech Technology and Southern Steel
The main advantage of trading using opposite Greatech Technology and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatech Technology position performs unexpectedly, Southern 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 Southern Steel will offset losses from the drop in Southern Steel's long position.| Greatech Technology vs. Uchi Technologies Bhd | Greatech Technology vs. PMB Technology Bhd | Greatech Technology vs. TAS Offshore Bhd | Greatech Technology vs. YX Precious Metals |
| Southern Steel vs. Supercomnet Technologies Bhd | Southern Steel vs. CPE Technology Berhad | Southern Steel vs. ES Ceramics Technology | Southern Steel vs. Greatech Technology 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 CEOs Directory module to screen CEOs from public companies around the world.
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