Correlation Between Steel Hawk and Sunway Construction
Can any of the company-specific risk be diversified away by investing in both Steel Hawk and Sunway Construction 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 Sunway Construction 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 Sunway Construction Group, you can compare the effects of market volatilities on Steel Hawk and Sunway Construction 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 Sunway Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Hawk and Sunway Construction.
Diversification Opportunities for Steel Hawk and Sunway Construction
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Steel and Sunway is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Steel Hawk Berhad and Sunway Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunway Construction 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 Sunway Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunway Construction has no effect on the direction of Steel Hawk i.e., Steel Hawk and Sunway Construction go up and down completely randomly.
Pair Corralation between Steel Hawk and Sunway Construction
Assuming the 90 days trading horizon Steel Hawk Berhad is expected to generate 0.53 times more return on investment than Sunway Construction. However, Steel Hawk Berhad is 1.88 times less risky than Sunway Construction. It trades about -0.13 of its potential returns per unit of risk. Sunway Construction Group is currently generating about -0.4 per unit of risk. If you would invest 49.00 in Steel Hawk Berhad on November 5, 2024 and sell it today you would lose (3.00) from holding Steel Hawk Berhad or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Hawk Berhad vs. Sunway Construction Group
Performance |
| Timeline |
| Steel Hawk Berhad |
| Sunway Construction |
Steel Hawk and Sunway Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Hawk and Sunway Construction
The main advantage of trading using opposite Steel Hawk and Sunway Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Hawk position performs unexpectedly, Sunway Construction 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 Sunway Construction will offset losses from the drop in Sunway Construction's long position.| Steel Hawk vs. Malayan Banking Bhd | Steel Hawk vs. Public Bank Bhd | Steel Hawk vs. Petronas Chemicals Group | Steel Hawk vs. Tenaga Nasional Bhd |
| Sunway Construction vs. CB Industrial Product | Sunway Construction vs. YTL Hospitality REIT | Sunway Construction vs. Press Metal Bhd | Sunway Construction vs. Choo Bee Metal |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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