Correlation Between Mycron Steel and LPI Capital
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and LPI Capital 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 LPI Capital 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 LPI Capital Bhd, you can compare the effects of market volatilities on Mycron Steel and LPI Capital 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 LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and LPI Capital.
Diversification Opportunities for Mycron Steel and LPI Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mycron and LPI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital 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 LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and LPI Capital go up and down completely randomly.
Pair Corralation between Mycron Steel and LPI Capital
Assuming the 90 days trading horizon Mycron Steel is expected to generate 2.31 times less return on investment than LPI Capital. In addition to that, Mycron Steel is 4.95 times more volatile than LPI Capital Bhd. It trades about 0.0 of its total potential returns per unit of risk. LPI Capital Bhd is currently generating about 0.04 per unit of volatility. If you would invest 1,177 in LPI Capital Bhd on September 4, 2024 and sell it today you would earn a total of 135.00 from holding LPI Capital Bhd or generate 11.47% 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. LPI Capital Bhd
Performance |
| Timeline |
| Mycron Steel Bhd |
| LPI Capital Bhd |
Mycron Steel and LPI Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and LPI Capital
The main advantage of trading using opposite Mycron Steel and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital's long position.| Mycron Steel vs. Sunzen Biotech Bhd | Mycron Steel vs. Choo Bee Metal | Mycron Steel vs. Radiant Globaltech Bhd | Mycron Steel vs. Supercomnet Technologies Bhd |
| LPI Capital vs. Lotte Chemical Titan | LPI Capital vs. YX Precious Metals | LPI Capital vs. Sunway Construction Group | LPI Capital vs. Mycron Steel 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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