Correlation Between Hartalega Holdings and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both Hartalega Holdings and Malaysia 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 Hartalega Holdings and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartalega Holdings Bhd and Malaysia Steel Works, you can compare the effects of market volatilities on Hartalega Holdings and Malaysia 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 Hartalega Holdings with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartalega Holdings and Malaysia Steel.
Diversification Opportunities for Hartalega Holdings and Malaysia Steel
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hartalega and Malaysia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hartalega Holdings Bhd and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works and Hartalega Holdings 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 Hartalega Holdings Bhd are associated (or correlated) with Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of Hartalega Holdings i.e., Hartalega Holdings and Malaysia Steel go up and down completely randomly.
Pair Corralation between Hartalega Holdings and Malaysia Steel
Assuming the 90 days trading horizon Hartalega Holdings Bhd is expected to generate 0.83 times more return on investment than Malaysia Steel. However, Hartalega Holdings Bhd is 1.21 times less risky than Malaysia Steel. It trades about 0.25 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about 0.01 per unit of risk. If you would invest 321.00 in Hartalega Holdings Bhd on September 5, 2024 and sell it today you would earn a total of 36.00 from holding Hartalega Holdings Bhd or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartalega Holdings Bhd vs. Malaysia Steel Works
Performance |
| Timeline |
| Hartalega Holdings Bhd |
| Malaysia Steel Works |
Hartalega Holdings and Malaysia Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartalega Holdings and Malaysia Steel
The main advantage of trading using opposite Hartalega Holdings and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartalega Holdings position performs unexpectedly, Malaysia 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 Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.| Hartalega Holdings vs. Southern Steel Bhd | Hartalega Holdings vs. Public Bank Bhd | Hartalega Holdings vs. Computer Forms Bhd | Hartalega Holdings vs. CPE Technology Berhad |
| Malaysia Steel vs. Resintech Bhd | Malaysia Steel vs. MI Technovation Bhd | Malaysia Steel vs. Press Metal Bhd | Malaysia Steel vs. Mercury Industries 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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