Correlation Between Cengild Medical and Leader Steel
Can any of the company-specific risk be diversified away by investing in both Cengild Medical and Leader 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 Cengild Medical and Leader Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cengild Medical Berhad and Leader Steel Holdings, you can compare the effects of market volatilities on Cengild Medical and Leader 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 Cengild Medical with a short position of Leader Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cengild Medical and Leader Steel.
Diversification Opportunities for Cengild Medical and Leader Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cengild and Leader is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad and Leader Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Steel Holdings and Cengild Medical 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 Cengild Medical Berhad are associated (or correlated) with Leader Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Steel Holdings has no effect on the direction of Cengild Medical i.e., Cengild Medical and Leader Steel go up and down completely randomly.
Pair Corralation between Cengild Medical and Leader Steel
Assuming the 90 days trading horizon Cengild Medical Berhad is expected to generate 0.74 times more return on investment than Leader Steel. However, Cengild Medical Berhad is 1.35 times less risky than Leader Steel. It trades about 0.14 of its potential returns per unit of risk. Leader Steel Holdings is currently generating about -0.07 per unit of risk. If you would invest 26.00 in Cengild Medical Berhad on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Cengild Medical Berhad or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cengild Medical Berhad vs. Leader Steel Holdings
Performance |
| Timeline |
| Cengild Medical Berhad |
| Leader Steel Holdings |
Cengild Medical and Leader Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cengild Medical and Leader Steel
The main advantage of trading using opposite Cengild Medical and Leader Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cengild Medical position performs unexpectedly, Leader 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 Leader Steel will offset losses from the drop in Leader Steel's long position.| Cengild Medical vs. Senheng New Retail | Cengild Medical vs. CSC Steel Holdings | Cengild Medical vs. Sports Toto Berhad | Cengild Medical vs. Star Media Group |
| Leader Steel vs. Pantech Group Holdings | Leader Steel vs. Coraza Integrated Technology | Leader Steel vs. Choo Bee Metal | Leader 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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