Correlation Between EA Technique and Southern Steel

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both EA Technique 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 EA Technique and Southern Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Technique M and Southern Steel Bhd, you can compare the effects of market volatilities on EA Technique 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 EA Technique with a short position of Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Technique and Southern Steel.

Diversification Opportunities for EA Technique and Southern Steel

5259SouthernDiversified Away5259SouthernDiversified Away100%
-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between 5259 and Southern is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding EA Technique M 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 EA Technique 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 EA Technique M 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 EA Technique i.e., EA Technique and Southern Steel go up and down completely randomly.

Pair Corralation between EA Technique and Southern Steel

Assuming the 90 days trading horizon EA Technique M is expected to generate 1.72 times more return on investment than Southern Steel. However, EA Technique is 1.72 times more volatile than Southern Steel Bhd. It trades about 0.03 of its potential returns per unit of risk. Southern Steel Bhd is currently generating about -0.12 per unit of risk. If you would invest  30.00  in EA Technique M on November 25, 2024 and sell it today you would earn a total of  1.00  from holding EA Technique M or generate 3.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.36%
ValuesDaily Returns

EA Technique M  vs.  Southern Steel Bhd

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.155259 5665
       Timeline  
EA Technique M 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in EA Technique M are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, EA Technique is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.280.290.30.310.320.330.340.350.360.37
Southern Steel Bhd 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Southern Steel Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.480.490.50.510.520.530.540.550.560.57

EA Technique and Southern Steel Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.5-7.11-4.73-2.340.02.344.777.199.6212.04 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.155259 5665
       Returns  

Pair Trading with EA Technique and Southern Steel

The main advantage of trading using opposite EA Technique and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Technique 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.
The idea behind EA Technique M and Southern Steel Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency