Correlation Between Mycron Steel and PESTECH International
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and PESTECH International 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 PESTECH International 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 PESTECH International Bhd, you can compare the effects of market volatilities on Mycron Steel and PESTECH International 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 PESTECH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and PESTECH International.
Diversification Opportunities for Mycron Steel and PESTECH International
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mycron and PESTECH is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and PESTECH International Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PESTECH International Bhd 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 PESTECH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PESTECH International Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and PESTECH International go up and down completely randomly.
Pair Corralation between Mycron Steel and PESTECH International
Assuming the 90 days trading horizon Mycron Steel Bhd is expected to generate 0.68 times more return on investment than PESTECH International. However, Mycron Steel Bhd is 1.47 times less risky than PESTECH International. It trades about -0.09 of its potential returns per unit of risk. PESTECH International Bhd is currently generating about -0.28 per unit of risk. If you would invest 36.00 in Mycron Steel Bhd on November 7, 2024 and sell it today you would lose (2.00) from holding Mycron Steel Bhd or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. PESTECH International Bhd
Performance |
| Timeline |
| Mycron Steel Bhd |
| PESTECH International Bhd |
Mycron Steel and PESTECH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and PESTECH International
The main advantage of trading using opposite Mycron Steel and PESTECH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, PESTECH International 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 PESTECH International will offset losses from the drop in PESTECH International's long position.| Mycron Steel vs. Tex Cycle Technology | Mycron Steel vs. Mercury Industries Bhd | Mycron Steel vs. Homeritz Bhd | Mycron Steel vs. YX Precious Metals |
| PESTECH International vs. Aeon Credit Service | PESTECH International vs. Resintech Bhd | PESTECH International vs. Cloudpoint Technology Berhad | PESTECH International vs. Binasat Communications 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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