Correlation Between CSC Steel and Greatech Technology
Can any of the company-specific risk be diversified away by investing in both CSC Steel and Greatech Technology 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 Greatech Technology 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 Greatech Technology Bhd, you can compare the effects of market volatilities on CSC Steel and Greatech Technology 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 Greatech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and Greatech Technology.
Diversification Opportunities for CSC Steel and Greatech Technology
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSC and Greatech is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and Greatech Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatech Technology 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 Greatech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatech Technology Bhd has no effect on the direction of CSC Steel i.e., CSC Steel and Greatech Technology go up and down completely randomly.
Pair Corralation between CSC Steel and Greatech Technology
Assuming the 90 days trading horizon CSC Steel Holdings is expected to generate 0.61 times more return on investment than Greatech Technology. However, CSC Steel Holdings is 1.63 times less risky than Greatech Technology. It trades about 0.02 of its potential returns per unit of risk. Greatech Technology Bhd is currently generating about -0.01 per unit of risk. If you would invest 112.00 in CSC Steel Holdings on September 3, 2024 and sell it today you would earn a total of 6.00 from holding CSC Steel Holdings or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSC Steel Holdings vs. Greatech Technology Bhd
Performance |
| Timeline |
| CSC Steel Holdings |
| Greatech Technology Bhd |
CSC Steel and Greatech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and Greatech Technology
The main advantage of trading using opposite CSC Steel and Greatech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, Greatech Technology 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 Greatech Technology will offset losses from the drop in Greatech Technology's long position.| CSC Steel vs. Press Metal Bhd | CSC Steel vs. Malaysia Steel Works | CSC Steel vs. Choo Bee Metal | CSC Steel vs. Eonmetall Group Bhd |
| Greatech Technology vs. Genetec Technology Bhd | Greatech Technology vs. PIE Industrial Bhd | Greatech Technology vs. Supercomnet Technologies Bhd | Greatech Technology vs. Kobay Tech 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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