Correlation Between Homeritz Bhd and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Homeritz Bhd 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 Homeritz Bhd and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homeritz Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on Homeritz Bhd 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 Homeritz Bhd with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homeritz Bhd and CSC Steel.
Diversification Opportunities for Homeritz Bhd and CSC Steel
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Homeritz and CSC is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Homeritz Bhd 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 Homeritz Bhd 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 Homeritz Bhd 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 Homeritz Bhd i.e., Homeritz Bhd and CSC Steel go up and down completely randomly.
Pair Corralation between Homeritz Bhd and CSC Steel
Assuming the 90 days trading horizon Homeritz Bhd is expected to generate 1.11 times more return on investment than CSC Steel. However, Homeritz Bhd is 1.11 times more volatile than CSC Steel Holdings. It trades about 0.02 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 51.00 in Homeritz Bhd on August 26, 2024 and sell it today you would earn a total of 6.00 from holding Homeritz Bhd or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.94% |
| Values | Daily Returns |
Homeritz Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| Homeritz Bhd |
| CSC Steel Holdings |
Homeritz Bhd and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homeritz Bhd and CSC Steel
The main advantage of trading using opposite Homeritz Bhd and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homeritz Bhd 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.| Homeritz Bhd vs. Lyc Healthcare Bhd | Homeritz Bhd vs. Daya Materials Bhd | Homeritz Bhd vs. Rubberex M | Homeritz Bhd vs. Sungei Bagan Rubber |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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