Correlation Between Public Bank and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Public Bank 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 Public Bank and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Bank Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on Public Bank 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 Public Bank with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Bank and CSC Steel.
Diversification Opportunities for Public Bank and CSC Steel
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and CSC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Public Bank 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 Public Bank 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 Public Bank 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 Public Bank i.e., Public Bank and CSC Steel go up and down completely randomly.
Pair Corralation between Public Bank and CSC Steel
Assuming the 90 days trading horizon Public Bank Bhd is expected to under-perform the CSC Steel. But the stock apears to be less risky and, when comparing its historical volatility, Public Bank Bhd is 1.09 times less risky than CSC Steel. The stock trades about -0.05 of its potential returns per unit of risk. The CSC Steel Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 117.00 in CSC Steel Holdings on November 28, 2024 and sell it today you would lose (2.00) from holding CSC Steel Holdings or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Bank Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| Public Bank Bhd |
| CSC Steel Holdings |
Public Bank and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Bank and CSC Steel
The main advantage of trading using opposite Public Bank and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Bank 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.| Public Bank vs. Alliance Financial Group | Public Bank vs. ES Ceramics Technology | Public Bank vs. Farm Price Holdings | Public Bank vs. PMB Technology Bhd |
| CSC Steel vs. Eversafe Rubber Bhd | CSC Steel vs. Systech Bhd | CSC Steel vs. Dataprep Holdings Bhd | CSC Steel vs. MI Technovation 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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