Correlation Between Mycron Steel and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and PIE Industrial 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 PIE Industrial 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 PIE Industrial Bhd, you can compare the effects of market volatilities on Mycron Steel and PIE Industrial 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 PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and PIE Industrial.
Diversification Opportunities for Mycron Steel and PIE Industrial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mycron and PIE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial 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 PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and PIE Industrial go up and down completely randomly.
Pair Corralation between Mycron Steel and PIE Industrial
Assuming the 90 days trading horizon Mycron Steel is expected to generate 3.12 times less return on investment than PIE Industrial. In addition to that, Mycron Steel is 1.42 times more volatile than PIE Industrial Bhd. It trades about 0.05 of its total potential returns per unit of risk. PIE Industrial Bhd is currently generating about 0.23 per unit of volatility. If you would invest 526.00 in PIE Industrial Bhd on August 27, 2024 and sell it today you would earn a total of 64.00 from holding PIE Industrial Bhd or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. PIE Industrial Bhd
Performance |
| Timeline |
| Mycron Steel Bhd |
| PIE Industrial Bhd |
Mycron Steel and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and PIE Industrial
The main advantage of trading using opposite Mycron Steel and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, PIE Industrial 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 PIE Industrial will offset losses from the drop in PIE Industrial's long position.| Mycron Steel vs. Press Metal Bhd | Mycron Steel vs. Southern Steel Bhd | Mycron Steel vs. Eonmetall Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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