Correlation Between CSC Steel and Bina Darulaman
Can any of the company-specific risk be diversified away by investing in both CSC Steel and Bina Darulaman 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 Bina Darulaman 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 Bina Darulaman Bhd, you can compare the effects of market volatilities on CSC Steel and Bina Darulaman 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 Bina Darulaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and Bina Darulaman.
Diversification Opportunities for CSC Steel and Bina Darulaman
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSC and Bina is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and Bina Darulaman Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bina Darulaman 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 Bina Darulaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bina Darulaman Bhd has no effect on the direction of CSC Steel i.e., CSC Steel and Bina Darulaman go up and down completely randomly.
Pair Corralation between CSC Steel and Bina Darulaman
Assuming the 90 days trading horizon CSC Steel is expected to generate 2.15 times less return on investment than Bina Darulaman. But when comparing it to its historical volatility, CSC Steel Holdings is 2.11 times less risky than Bina Darulaman. It trades about 0.02 of its potential returns per unit of risk. Bina Darulaman Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Bina Darulaman Bhd on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Bina Darulaman Bhd or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.55% |
| Values | Daily Returns |
CSC Steel Holdings vs. Bina Darulaman Bhd
Performance |
| Timeline |
| CSC Steel Holdings |
| Bina Darulaman Bhd |
CSC Steel and Bina Darulaman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and Bina Darulaman
The main advantage of trading using opposite CSC Steel and Bina Darulaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, Bina Darulaman 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 Bina Darulaman will offset losses from the drop in Bina Darulaman's long position.| CSC Steel vs. Globetronics Tech Bhd | CSC Steel vs. Ho Hup Construction | CSC Steel vs. JF Technology BHD | CSC Steel vs. MI Technovation Bhd |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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