Correlation Between Pantech Group and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Pantech Group and CSC Steel 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 Pantech Group and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pantech Group Holdings and CSC Steel Holdings, you can compare the effects of market volatilities on Pantech Group and CSC Steel 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 Pantech Group with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantech Group and CSC Steel.
Diversification Opportunities for Pantech Group and CSC Steel
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pantech and CSC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pantech Group Holdings and CSC Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSC Steel Holdings and Pantech Group 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 Pantech Group Holdings are associated (or correlated) with CSC Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSC Steel Holdings has no effect on the direction of Pantech Group i.e., Pantech Group and CSC Steel go up and down completely randomly.
Pair Corralation between Pantech Group and CSC Steel
Assuming the 90 days trading horizon Pantech Group Holdings is expected to generate 0.66 times more return on investment than CSC Steel. However, Pantech Group Holdings is 1.51 times less risky than CSC Steel. It trades about 0.29 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about 0.01 per unit of risk. If you would invest 93.00 in Pantech Group Holdings on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Pantech Group Holdings or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantech Group Holdings vs. CSC Steel Holdings
Performance |
| Timeline |
| Pantech Group Holdings |
| CSC Steel Holdings |
Pantech Group and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantech Group and CSC Steel
The main advantage of trading using opposite Pantech Group and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantech Group position performs unexpectedly, CSC Steel 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 CSC Steel will offset losses from the drop in CSC Steel's long position.| Pantech Group vs. Eonmetall Group Bhd | Pantech Group vs. Press Metal Bhd | Pantech Group vs. Sungei Bagan Rubber | Pantech Group vs. Petronas Chemicals Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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