Correlation Between Pantech Group and Southern Steel
Can any of the company-specific risk be diversified away by investing in both Pantech Group and Southern 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 Southern 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 Southern Steel Bhd, you can compare the effects of market volatilities on Pantech Group and Southern 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 Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantech Group and Southern Steel.
Diversification Opportunities for Pantech Group and Southern Steel
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pantech and Southern is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pantech Group Holdings and Southern Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Steel Bhd 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 Southern Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Steel Bhd has no effect on the direction of Pantech Group i.e., Pantech Group and Southern Steel go up and down completely randomly.
Pair Corralation between Pantech Group and Southern Steel
Assuming the 90 days trading horizon Pantech Group Holdings is expected to under-perform the Southern Steel. But the stock apears to be less risky and, when comparing its historical volatility, Pantech Group Holdings is 1.72 times less risky than Southern Steel. The stock trades about -0.11 of its potential returns per unit of risk. The Southern Steel Bhd is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Southern Steel Bhd on November 3, 2024 and sell it today you would lose (1.00) from holding Southern Steel Bhd or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantech Group Holdings vs. Southern Steel Bhd
Performance |
| Timeline |
| Pantech Group Holdings |
| Southern Steel Bhd |
Pantech Group and Southern Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantech Group and Southern Steel
The main advantage of trading using opposite Pantech Group and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantech Group position performs unexpectedly, Southern 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 Southern Steel will offset losses from the drop in Southern Steel's long position.| Pantech Group vs. Dnonce Tech Bhd | Pantech Group vs. Minetech Resources Bhd | Pantech Group vs. Aurelius Technologies Bhd | Pantech Group vs. HeiTech Padu Bhd |
| Southern Steel vs. Farm Price Holdings | Southern Steel vs. Petronas Chemicals Group | Southern Steel vs. Press Metal Bhd | Southern Steel vs. FARM FRESH 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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