Correlation Between CSC Steel and Shangri La
Can any of the company-specific risk be diversified away by investing in both CSC Steel and Shangri La 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 Shangri La 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 Shangri La Hotels, you can compare the effects of market volatilities on CSC Steel and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and Shangri La.
Diversification Opportunities for CSC Steel and Shangri La
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CSC and Shangri is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and Shangri La Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Hotels 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Hotels has no effect on the direction of CSC Steel i.e., CSC Steel and Shangri La go up and down completely randomly.
Pair Corralation between CSC Steel and Shangri La
Assuming the 90 days trading horizon CSC Steel Holdings is expected to generate 0.74 times more return on investment than Shangri La. However, CSC Steel Holdings is 1.35 times less risky than Shangri La. It trades about 0.02 of its potential returns per unit of risk. Shangri La Hotels is currently generating about -0.05 per unit of risk. If you would invest 106.00 in CSC Steel Holdings on September 4, 2024 and sell it today you would earn a total of 12.00 from holding CSC Steel Holdings or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSC Steel Holdings vs. Shangri La Hotels
Performance |
| Timeline |
| CSC Steel Holdings |
| Shangri La Hotels |
CSC Steel and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and Shangri La
The main advantage of trading using opposite CSC Steel and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| CSC Steel vs. Malaysia Steel Works | CSC Steel vs. Choo Bee Metal | CSC Steel vs. Eonmetall Group Bhd | CSC Steel vs. Mycron Steel Bhd |
| Shangri La vs. Berjaya Food Bhd | Shangri La vs. Minetech Resources Bhd | Shangri La vs. Swift Haulage Bhd | Shangri La vs. Insas 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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