Correlation Between Mycron Steel and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and ES Ceramics 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 Mycron Steel and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mycron Steel Bhd and ES Ceramics Technology, you can compare the effects of market volatilities on Mycron Steel and ES Ceramics 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 Mycron Steel with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and ES Ceramics.
Diversification Opportunities for Mycron Steel and ES Ceramics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mycron and 0100 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Mycron 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 Mycron Steel Bhd are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Mycron Steel i.e., Mycron Steel and ES Ceramics go up and down completely randomly.
Pair Corralation between Mycron Steel and ES Ceramics
Assuming the 90 days trading horizon Mycron Steel Bhd is expected to generate 1.12 times more return on investment than ES Ceramics. However, Mycron Steel is 1.12 times more volatile than ES Ceramics Technology. It trades about 0.05 of its potential returns per unit of risk. ES Ceramics Technology is currently generating about -0.08 per unit of risk. If you would invest 35.00 in Mycron Steel Bhd on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Mycron Steel Bhd or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. ES Ceramics Technology
Performance |
| Timeline |
| Mycron Steel Bhd |
| ES Ceramics Technology |
Mycron Steel and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and ES Ceramics
The main advantage of trading using opposite Mycron Steel and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Mycron Steel vs. Pantech Group Holdings | Mycron Steel vs. Coraza Integrated Technology | Mycron Steel vs. Choo Bee Metal | Mycron Steel vs. Eonmetall Group Bhd |
| ES Ceramics vs. Magni Tech Industries | ES Ceramics vs. Digistar Bhd | ES Ceramics vs. Swift Haulage Bhd | ES Ceramics vs. Insas 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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