Correlation Between Malaysia Steel and Public Packages
Can any of the company-specific risk be diversified away by investing in both Malaysia Steel and Public Packages 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 Malaysia Steel and Public Packages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malaysia Steel Works and Public Packages Holdings, you can compare the effects of market volatilities on Malaysia Steel and Public Packages 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 Malaysia Steel with a short position of Public Packages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaysia Steel and Public Packages.
Diversification Opportunities for Malaysia Steel and Public Packages
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Malaysia and Public is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Malaysia Steel Works and Public Packages Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Packages Holdings and Malaysia 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 Malaysia Steel Works are associated (or correlated) with Public Packages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Packages Holdings has no effect on the direction of Malaysia Steel i.e., Malaysia Steel and Public Packages go up and down completely randomly.
Pair Corralation between Malaysia Steel and Public Packages
Assuming the 90 days trading horizon Malaysia Steel Works is expected to generate 1.35 times more return on investment than Public Packages. However, Malaysia Steel is 1.35 times more volatile than Public Packages Holdings. It trades about 0.16 of its potential returns per unit of risk. Public Packages Holdings is currently generating about 0.13 per unit of risk. If you would invest 31.00 in Malaysia Steel Works on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Malaysia Steel Works or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malaysia Steel Works vs. Public Packages Holdings
Performance |
| Timeline |
| Malaysia Steel Works |
| Public Packages Holdings |
Malaysia Steel and Public Packages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malaysia Steel and Public Packages
The main advantage of trading using opposite Malaysia Steel and Public Packages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malaysia Steel position performs unexpectedly, Public Packages 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 Public Packages will offset losses from the drop in Public Packages' long position.| Malaysia Steel vs. Pantech Group Holdings | Malaysia Steel vs. Coraza Integrated Technology | Malaysia Steel vs. Choo Bee Metal | Malaysia Steel vs. Eonmetall Group Bhd |
| Public Packages vs. Malayan Banking Bhd | Public Packages vs. Public Bank Bhd | Public Packages vs. Petronas Chemicals Group | Public Packages vs. Tenaga Nasional 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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