Correlation Between CSC Steel and MClean Technologies
Can any of the company-specific risk be diversified away by investing in both CSC Steel and MClean Technologies 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 CSC Steel and MClean Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSC Steel Holdings and MClean Technologies Bhd, you can compare the effects of market volatilities on CSC Steel and MClean Technologies 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 CSC Steel with a short position of MClean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and MClean Technologies.
Diversification Opportunities for CSC Steel and MClean Technologies
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSC and MClean is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and MClean Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MClean Technologies Bhd and CSC 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 CSC Steel Holdings are associated (or correlated) with MClean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MClean Technologies Bhd has no effect on the direction of CSC Steel i.e., CSC Steel and MClean Technologies go up and down completely randomly.
Pair Corralation between CSC Steel and MClean Technologies
Assuming the 90 days trading horizon CSC Steel Holdings is expected to generate 0.18 times more return on investment than MClean Technologies. However, CSC Steel Holdings is 5.67 times less risky than MClean Technologies. It trades about -0.49 of its potential returns per unit of risk. MClean Technologies Bhd is currently generating about -0.15 per unit of risk. If you would invest 120.00 in CSC Steel Holdings on November 2, 2024 and sell it today you would lose (8.00) from holding CSC Steel Holdings or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSC Steel Holdings vs. MClean Technologies Bhd
Performance |
| Timeline |
| CSC Steel Holdings |
| MClean Technologies Bhd |
CSC Steel and MClean Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and MClean Technologies
The main advantage of trading using opposite CSC Steel and MClean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, MClean Technologies 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 MClean Technologies will offset losses from the drop in MClean Technologies' long position.| CSC Steel vs. Cengild Medical Berhad | CSC Steel vs. Greatech Technology Bhd | CSC Steel vs. Sports Toto Berhad | CSC Steel vs. PMB Technology Bhd |
| MClean Technologies vs. MI Technovation Bhd | MClean Technologies vs. Resintech Bhd | MClean Technologies vs. Bank Islam Malaysia | MClean Technologies vs. Southern 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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