Correlation Between CSC Steel and Minetech Resources
Can any of the company-specific risk be diversified away by investing in both CSC Steel and Minetech Resources 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 Minetech Resources 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 Minetech Resources Bhd, you can compare the effects of market volatilities on CSC Steel and Minetech Resources 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 Minetech Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and Minetech Resources.
Diversification Opportunities for CSC Steel and Minetech Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between CSC and Minetech is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and Minetech Resources Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minetech Resources 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 Minetech Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minetech Resources Bhd has no effect on the direction of CSC Steel i.e., CSC Steel and Minetech Resources go up and down completely randomly.
Pair Corralation between CSC Steel and Minetech Resources
Assuming the 90 days trading horizon CSC Steel is expected to generate 15.18 times less return on investment than Minetech Resources. But when comparing it to its historical volatility, CSC Steel Holdings is 3.97 times less risky than Minetech Resources. It trades about 0.01 of its potential returns per unit of risk. Minetech Resources Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Minetech Resources Bhd on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Minetech Resources Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSC Steel Holdings vs. Minetech Resources Bhd
Performance |
| Timeline |
| CSC Steel Holdings |
| Minetech Resources Bhd |
CSC Steel and Minetech Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and Minetech Resources
The main advantage of trading using opposite CSC Steel and Minetech Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, Minetech Resources 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 Minetech Resources will offset losses from the drop in Minetech Resources' long position.| CSC Steel vs. K One Technology Bhd | CSC Steel vs. Public Bank Bhd | CSC Steel vs. Star Media Group | CSC Steel vs. Lyc Healthcare Bhd |
| Minetech Resources vs. Supercomnet Technologies Bhd | Minetech Resources vs. Mycron Steel Bhd | Minetech Resources vs. Dufu Tech Corp | Minetech Resources vs. Duopharma Biotech 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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