Correlation Between Insas Bhd and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both Insas Bhd and Lysaght Galvanized 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 Insas Bhd and Lysaght Galvanized into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Lysaght Galvanized Steel, you can compare the effects of market volatilities on Insas Bhd and Lysaght Galvanized 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 Insas Bhd with a short position of Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Lysaght Galvanized.
Diversification Opportunities for Insas Bhd and Lysaght Galvanized
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insas and Lysaght is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel and Insas 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 Insas Bhd are associated (or correlated) with Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of Insas Bhd i.e., Insas Bhd and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between Insas Bhd and Lysaght Galvanized
Assuming the 90 days trading horizon Insas Bhd is expected to generate 7.54 times less return on investment than Lysaght Galvanized. But when comparing it to its historical volatility, Insas Bhd is 4.0 times less risky than Lysaght Galvanized. It trades about 0.03 of its potential returns per unit of risk. Lysaght Galvanized Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 231.00 in Lysaght Galvanized Steel on September 2, 2024 and sell it today you would earn a total of 48.00 from holding Lysaght Galvanized Steel or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Insas Bhd vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| Insas Bhd |
| Lysaght Galvanized Steel |
Insas Bhd and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Lysaght Galvanized
The main advantage of trading using opposite Insas Bhd and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd position performs unexpectedly, Lysaght Galvanized 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 Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized's long position.| Insas Bhd vs. Malayan Banking Bhd | Insas Bhd vs. Public Bank Bhd | Insas Bhd vs. Petronas Chemicals Group | Insas Bhd vs. Tenaga Nasional 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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