Correlation Between Mycron Steel and Bank Islam
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and Bank Islam 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 Bank Islam 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 Bank Islam Malaysia, you can compare the effects of market volatilities on Mycron Steel and Bank Islam 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 Bank Islam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and Bank Islam.
Diversification Opportunities for Mycron Steel and Bank Islam
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mycron and Bank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and Bank Islam Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Islam Malaysia 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 Bank Islam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Islam Malaysia has no effect on the direction of Mycron Steel i.e., Mycron Steel and Bank Islam go up and down completely randomly.
Pair Corralation between Mycron Steel and Bank Islam
Assuming the 90 days trading horizon Mycron Steel Bhd is expected to under-perform the Bank Islam. In addition to that, Mycron Steel is 4.4 times more volatile than Bank Islam Malaysia. It trades about -0.09 of its total potential returns per unit of risk. Bank Islam Malaysia is currently generating about -0.02 per unit of volatility. If you would invest 248.00 in Bank Islam Malaysia on November 7, 2024 and sell it today you would lose (1.00) from holding Bank Islam Malaysia or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Mycron Steel Bhd vs. Bank Islam Malaysia
Performance |
| Timeline |
| Mycron Steel Bhd |
| Bank Islam Malaysia |
Mycron Steel and Bank Islam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and Bank Islam
The main advantage of trading using opposite Mycron Steel and Bank Islam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, Bank Islam 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 Bank Islam will offset losses from the drop in Bank Islam'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 |
| Bank Islam vs. Berjaya Food Bhd | Bank Islam vs. Al Aqar Healthcare | Bank Islam vs. Computer Forms Bhd | Bank Islam vs. KPJ Healthcare 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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