Correlation Between Malayan Banking and Southern Steel
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Southern 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 Southern 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 Southern Steel Bhd, you can compare the effects of market volatilities on Malayan Banking and Southern 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 Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Southern Steel.
Diversification Opportunities for Malayan Banking and Southern Steel
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Malayan and Southern is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Southern Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Steel Bhd 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 Southern Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Steel Bhd has no effect on the direction of Malayan Banking i.e., Malayan Banking and Southern Steel go up and down completely randomly.
Pair Corralation between Malayan Banking and Southern Steel
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to under-perform the Southern Steel. But the stock apears to be less risky and, when comparing its historical volatility, Malayan Banking Bhd is 2.34 times less risky than Southern Steel. The stock trades about -0.12 of its potential returns per unit of risk. The Southern Steel Bhd is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Southern Steel Bhd on January 26, 2025 and sell it today you would earn a total of 6.00 from holding Southern Steel Bhd or generate 18.18% 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. Southern Steel Bhd
Performance |
| Timeline |
| Malayan Banking Bhd |
| Southern Steel Bhd |
Malayan Banking and Southern Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and Southern Steel
The main advantage of trading using opposite Malayan Banking and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Southern 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 Southern Steel will offset losses from the drop in Southern Steel's long position.| Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. ONETECH SOLUTIONS HOLDINGS | Malayan Banking vs. Aurelius Technologies Bhd | Malayan Banking vs. Advanced Packaging Tech |
| Southern Steel vs. Press Metal Bhd | Southern Steel vs. PMB Technology Bhd | Southern Steel vs. Pantech Group Holdings | Southern Steel vs. CSC Steel Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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