Correlation Between Steel Hawk and Alliance Financial
Can any of the company-specific risk be diversified away by investing in both Steel Hawk and Alliance Financial 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 Steel Hawk and Alliance Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Hawk Berhad and Alliance Financial Group, you can compare the effects of market volatilities on Steel Hawk and Alliance Financial 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 Steel Hawk with a short position of Alliance Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Hawk and Alliance Financial.
Diversification Opportunities for Steel Hawk and Alliance Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steel and Alliance is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Steel Hawk Berhad and Alliance Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Financial and Steel Hawk 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 Steel Hawk Berhad are associated (or correlated) with Alliance Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Financial has no effect on the direction of Steel Hawk i.e., Steel Hawk and Alliance Financial go up and down completely randomly.
Pair Corralation between Steel Hawk and Alliance Financial
Assuming the 90 days trading horizon Steel Hawk Berhad is expected to generate 14.47 times more return on investment than Alliance Financial. However, Steel Hawk is 14.47 times more volatile than Alliance Financial Group. It trades about 0.11 of its potential returns per unit of risk. Alliance Financial Group is currently generating about 0.13 per unit of risk. If you would invest 11.00 in Steel Hawk Berhad on November 2, 2024 and sell it today you would earn a total of 34.00 from holding Steel Hawk Berhad or generate 309.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Steel Hawk Berhad vs. Alliance Financial Group
Performance |
Timeline |
Steel Hawk Berhad |
Alliance Financial |
Steel Hawk and Alliance Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Hawk and Alliance Financial
The main advantage of trading using opposite Steel Hawk and Alliance Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Hawk position performs unexpectedly, Alliance Financial 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 Alliance Financial will offset losses from the drop in Alliance Financial's long position.Steel Hawk vs. Sunzen Biotech Bhd | Steel Hawk vs. Systech Bhd | Steel Hawk vs. Cosmos Technology International | Steel Hawk vs. CPE Technology Berhad |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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