Correlation Between Aeon Credit and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Aeon Credit 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 Aeon Credit and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Credit Service and CSC Steel Holdings, you can compare the effects of market volatilities on Aeon Credit 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 Aeon Credit with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Credit and CSC Steel.
Diversification Opportunities for Aeon Credit and CSC Steel
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aeon and CSC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Credit Service 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 Aeon Credit 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 Aeon Credit Service 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 Aeon Credit i.e., Aeon Credit and CSC Steel go up and down completely randomly.
Pair Corralation between Aeon Credit and CSC Steel
Assuming the 90 days trading horizon Aeon Credit Service is expected to generate 0.84 times more return on investment than CSC Steel. However, Aeon Credit Service is 1.19 times less risky than CSC Steel. It trades about 0.03 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about 0.02 per unit of risk. If you would invest 598.00 in Aeon Credit Service on August 24, 2024 and sell it today you would earn a total of 82.00 from holding Aeon Credit Service or generate 13.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Credit Service vs. CSC Steel Holdings
Performance |
| Timeline |
| Aeon Credit Service |
| CSC Steel Holdings |
Aeon Credit and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Credit and CSC Steel
The main advantage of trading using opposite Aeon Credit and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Credit 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.| Aeon Credit vs. Oriental Food Industries | Aeon Credit vs. Hong Leong Bank | Aeon Credit vs. Alliance Financial Group | Aeon Credit vs. Kawan Food Bhd |
| CSC Steel vs. Press Metal Bhd | CSC Steel vs. PMB Technology Bhd | CSC Steel vs. Pantech Group Holdings | CSC Steel vs. Coraza Integrated Technology |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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