Correlation Between Steel Hawk and KPJ Healthcare
Can any of the company-specific risk be diversified away by investing in both Steel Hawk and KPJ Healthcare 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 KPJ Healthcare 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 KPJ Healthcare Bhd, you can compare the effects of market volatilities on Steel Hawk and KPJ Healthcare 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 KPJ Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Hawk and KPJ Healthcare.
Diversification Opportunities for Steel Hawk and KPJ Healthcare
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steel and KPJ is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Steel Hawk Berhad and KPJ Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KPJ Healthcare Bhd 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 KPJ Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KPJ Healthcare Bhd has no effect on the direction of Steel Hawk i.e., Steel Hawk and KPJ Healthcare go up and down completely randomly.
Pair Corralation between Steel Hawk and KPJ Healthcare
Assuming the 90 days trading horizon Steel Hawk Berhad is expected to generate 1.52 times more return on investment than KPJ Healthcare. However, Steel Hawk is 1.52 times more volatile than KPJ Healthcare Bhd. It trades about -0.04 of its potential returns per unit of risk. KPJ Healthcare Bhd is currently generating about -0.16 per unit of risk. If you would invest 45.00 in Steel Hawk Berhad on October 23, 2024 and sell it today you would lose (1.00) from holding Steel Hawk Berhad or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Hawk Berhad vs. KPJ Healthcare Bhd
Performance |
| Timeline |
| Steel Hawk Berhad |
| KPJ Healthcare Bhd |
Steel Hawk and KPJ Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Hawk and KPJ Healthcare
The main advantage of trading using opposite Steel Hawk and KPJ Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Hawk position performs unexpectedly, KPJ Healthcare 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 KPJ Healthcare will offset losses from the drop in KPJ Healthcare's long position.| Steel Hawk vs. Riverview Rubber Estates | Steel Hawk vs. Melewar Industrial Group | Steel Hawk vs. Leader Steel Holdings | Steel Hawk vs. Southern Steel Bhd |
| KPJ Healthcare vs. Cloudpoint Technology Berhad | KPJ Healthcare vs. Kluang Rubber | KPJ Healthcare vs. CPE Technology Berhad | KPJ Healthcare vs. Petronas Chemicals Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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