Correlation Between IOI Bhd and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both IOI Bhd and Malaysia 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 IOI Bhd and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IOI Bhd and Malaysia Steel Works, you can compare the effects of market volatilities on IOI Bhd and Malaysia 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 IOI Bhd with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IOI Bhd and Malaysia Steel.
Diversification Opportunities for IOI Bhd and Malaysia Steel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IOI and Malaysia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding IOI Bhd and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works and IOI Bhd 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 IOI Bhd are associated (or correlated) with Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of IOI Bhd i.e., IOI Bhd and Malaysia Steel go up and down completely randomly.
Pair Corralation between IOI Bhd and Malaysia Steel
Assuming the 90 days trading horizon IOI Bhd is expected to generate 0.48 times more return on investment than Malaysia Steel. However, IOI Bhd is 2.09 times less risky than Malaysia Steel. It trades about 0.02 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about 0.0 per unit of risk. If you would invest 357.00 in IOI Bhd on September 4, 2024 and sell it today you would earn a total of 31.00 from holding IOI Bhd or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IOI Bhd vs. Malaysia Steel Works
Performance |
| Timeline |
| IOI Bhd |
| Malaysia Steel Works |
IOI Bhd and Malaysia Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IOI Bhd and Malaysia Steel
The main advantage of trading using opposite IOI Bhd and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IOI Bhd position performs unexpectedly, Malaysia 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 Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.| IOI Bhd vs. Malaysia Steel Works | IOI Bhd vs. Kobay Tech Bhd | IOI Bhd vs. Minetech Resources Bhd | IOI Bhd vs. Aurelius Technologies Bhd |
| Malaysia Steel vs. Cengild Medical Berhad | Malaysia Steel vs. Oriental Food Industries | Malaysia Steel vs. Eversafe Rubber Bhd | Malaysia Steel vs. Lotte Chemical Titan |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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