Correlation Between Malayan Banking and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Malayan Banking 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 Malayan Banking and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malayan Banking Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on Malayan Banking 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 Malayan Banking with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and CSC Steel.
Diversification Opportunities for Malayan Banking and CSC Steel
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Malayan and CSC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd 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 Malayan Banking 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 Malayan Banking Bhd 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 Malayan Banking i.e., Malayan Banking and CSC Steel go up and down completely randomly.
Pair Corralation between Malayan Banking and CSC Steel
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to under-perform the CSC Steel. But the stock apears to be less risky and, when comparing its historical volatility, Malayan Banking Bhd is 1.32 times less risky than CSC Steel. The stock trades about -0.15 of its potential returns per unit of risk. The CSC Steel Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 118.00 in CSC Steel Holdings on August 30, 2024 and sell it today you would earn a total of 0.00 from holding CSC Steel Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| Malayan Banking Bhd |
| CSC Steel Holdings |
Malayan Banking and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and CSC Steel
The main advantage of trading using opposite Malayan Banking and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking 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.| Malayan Banking vs. PIE Industrial Bhd | Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Binasat Communications Bhd | Malayan Banking vs. Choo Bee Metal |
| CSC Steel vs. K One Technology Bhd | CSC Steel vs. Public Bank Bhd | CSC Steel vs. Star Media Group | CSC Steel vs. Lyc Healthcare 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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