Correlation Between Steel Hawk and Mercury Industries
Can any of the company-specific risk be diversified away by investing in both Steel Hawk and Mercury Industries 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 Mercury Industries 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 Mercury Industries Bhd, you can compare the effects of market volatilities on Steel Hawk and Mercury Industries 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 Mercury Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Hawk and Mercury Industries.
Diversification Opportunities for Steel Hawk and Mercury Industries
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steel and Mercury is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Steel Hawk Berhad and Mercury Industries Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury Industries 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 Mercury Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury Industries Bhd has no effect on the direction of Steel Hawk i.e., Steel Hawk and Mercury Industries go up and down completely randomly.
Pair Corralation between Steel Hawk and Mercury Industries
Assuming the 90 days trading horizon Steel Hawk Berhad is expected to generate 10.06 times more return on investment than Mercury Industries. However, Steel Hawk is 10.06 times more volatile than Mercury Industries Bhd. It trades about 0.1 of its potential returns per unit of risk. Mercury Industries Bhd is currently generating about 0.01 per unit of risk. If you would invest 11.00 in Steel Hawk Berhad on November 3, 2024 and sell it today you would earn a total of 35.00 from holding Steel Hawk Berhad or generate 318.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Hawk Berhad vs. Mercury Industries Bhd
Performance |
| Timeline |
| Steel Hawk Berhad |
| Mercury Industries Bhd |
Steel Hawk and Mercury Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Hawk and Mercury Industries
The main advantage of trading using opposite Steel Hawk and Mercury Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Hawk position performs unexpectedly, Mercury Industries 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 Mercury Industries will offset losses from the drop in Mercury Industries' long position.| Steel Hawk vs. Sapura Industrial Bhd | Steel Hawk vs. Media Prima Bhd | Steel Hawk vs. Eversafe Rubber Bhd | Steel Hawk vs. Press Metal Bhd |
| Mercury Industries vs. Mycron Steel Bhd | Mercury Industries vs. Steel Hawk Berhad | Mercury Industries vs. Eonmetall Group Bhd | Mercury Industries vs. Malaysia Steel Works |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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