Correlation Between CSC Steel and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both CSC Steel and Icon Offshore 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 Icon Offshore 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 Icon Offshore Bhd, you can compare the effects of market volatilities on CSC Steel and Icon Offshore 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 Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and Icon Offshore.
Diversification Opportunities for CSC Steel and Icon Offshore
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSC and Icon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and Icon Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Offshore 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 Icon Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Offshore Bhd has no effect on the direction of CSC Steel i.e., CSC Steel and Icon Offshore go up and down completely randomly.
Pair Corralation between CSC Steel and Icon Offshore
Assuming the 90 days trading horizon CSC Steel Holdings is expected to under-perform the Icon Offshore. But the stock apears to be less risky and, when comparing its historical volatility, CSC Steel Holdings is 1.65 times less risky than Icon Offshore. The stock trades about -0.47 of its potential returns per unit of risk. The Icon Offshore Bhd is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Icon Offshore Bhd on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Icon Offshore Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CSC Steel Holdings vs. Icon Offshore Bhd
Performance |
| Timeline |
| CSC Steel Holdings |
| Icon Offshore Bhd |
CSC Steel and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and Icon Offshore
The main advantage of trading using opposite CSC Steel and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, Icon Offshore 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 Icon Offshore will offset losses from the drop in Icon Offshore's long position.| CSC Steel vs. Shangri La Hotels | CSC Steel vs. Sports Toto Berhad | CSC Steel vs. Media Prima Bhd | CSC Steel vs. Eonmetall Group Bhd |
| Icon Offshore vs. Oriental Food Industries | Icon Offshore vs. Public Bank Bhd | Icon Offshore vs. Eonmetall Group Bhd | Icon Offshore vs. Petronas Chemicals Group |
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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