Correlation Between YX Precious and CSC Steel
Can any of the company-specific risk be diversified away by investing in both YX Precious 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 YX Precious and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YX Precious Metals and CSC Steel Holdings, you can compare the effects of market volatilities on YX Precious 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 YX Precious with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of YX Precious and CSC Steel.
Diversification Opportunities for YX Precious and CSC Steel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0250 and CSC is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding YX Precious Metals 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 YX Precious 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 YX Precious Metals 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 YX Precious i.e., YX Precious and CSC Steel go up and down completely randomly.
Pair Corralation between YX Precious and CSC Steel
Assuming the 90 days trading horizon YX Precious Metals is expected to generate 2.23 times more return on investment than CSC Steel. However, YX Precious is 2.23 times more volatile than CSC Steel Holdings. It trades about 0.03 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about 0.02 per unit of risk. If you would invest 20.00 in YX Precious Metals on August 26, 2024 and sell it today you would earn a total of 6.00 from holding YX Precious Metals or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YX Precious Metals vs. CSC Steel Holdings
Performance |
| Timeline |
| YX Precious Metals |
| CSC Steel Holdings |
YX Precious and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YX Precious and CSC Steel
The main advantage of trading using opposite YX Precious and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YX Precious 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.| YX Precious vs. Malayan Banking Bhd | YX Precious vs. Public Bank Bhd | YX Precious vs. Petronas Chemicals Group | YX Precious vs. Tenaga Nasional 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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