Correlation Between CSC Steel and Press Metal
Can any of the company-specific risk be diversified away by investing in both CSC Steel and Press Metal 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 Press Metal 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 Press Metal Bhd, you can compare the effects of market volatilities on CSC Steel and Press Metal 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 Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSC Steel and Press Metal.
Diversification Opportunities for CSC Steel and Press Metal
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSC and Press is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CSC Steel Holdings and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal 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 Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of CSC Steel i.e., CSC Steel and Press Metal go up and down completely randomly.
Pair Corralation between CSC Steel and Press Metal
Assuming the 90 days trading horizon CSC Steel Holdings is expected to under-perform the Press Metal. But the stock apears to be less risky and, when comparing its historical volatility, CSC Steel Holdings is 2.42 times less risky than Press Metal. The stock trades about -0.49 of its potential returns per unit of risk. The Press Metal Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 483.00 in Press Metal Bhd on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Press Metal Bhd or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CSC Steel Holdings vs. Press Metal Bhd
Performance |
| Timeline |
| CSC Steel Holdings |
| Press Metal Bhd |
CSC Steel and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSC Steel and Press Metal
The main advantage of trading using opposite CSC Steel and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSC Steel position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal'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 |
| Press Metal vs. ONETECH SOLUTIONS HOLDINGS | Press Metal vs. Malayan Banking Bhd | Press Metal vs. Petronas Chemicals Group | Press Metal vs. Cloudpoint Technology Berhad |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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