Correlation Between Mayer Steel and Chun Yuan
Can any of the company-specific risk be diversified away by investing in both Mayer Steel and Chun Yuan 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 Mayer Steel and Chun Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayer Steel Pipe and Chun Yuan Steel, you can compare the effects of market volatilities on Mayer Steel and Chun Yuan 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 Mayer Steel with a short position of Chun Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayer Steel and Chun Yuan.
Diversification Opportunities for Mayer Steel and Chun Yuan
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mayer and Chun is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Mayer Steel Pipe and Chun Yuan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chun Yuan Steel and Mayer Steel 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 Mayer Steel Pipe are associated (or correlated) with Chun Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chun Yuan Steel has no effect on the direction of Mayer Steel i.e., Mayer Steel and Chun Yuan go up and down completely randomly.
Pair Corralation between Mayer Steel and Chun Yuan
Assuming the 90 days trading horizon Mayer Steel Pipe is expected to generate 1.17 times more return on investment than Chun Yuan. However, Mayer Steel is 1.17 times more volatile than Chun Yuan Steel. It trades about 0.03 of its potential returns per unit of risk. Chun Yuan Steel is currently generating about 0.03 per unit of risk. If you would invest 2,375 in Mayer Steel Pipe on September 3, 2024 and sell it today you would earn a total of 560.00 from holding Mayer Steel Pipe or generate 23.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayer Steel Pipe vs. Chun Yuan Steel
Performance |
| Timeline |
| Mayer Steel Pipe |
| Chun Yuan Steel |
Mayer Steel and Chun Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayer Steel and Chun Yuan
The main advantage of trading using opposite Mayer Steel and Chun Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayer Steel position performs unexpectedly, Chun Yuan 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 Chun Yuan will offset losses from the drop in Chun Yuan's long position.| Mayer Steel vs. Froch Enterprise Co | Mayer Steel vs. Hsin Kuang Steel | Mayer Steel vs. Chung Hung Steel | Mayer Steel vs. Tung Ho Steel |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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