Correlation Between MI Technovation and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both MI Technovation 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 MI Technovation and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Technovation Bhd and Malaysia Steel Works, you can compare the effects of market volatilities on MI Technovation 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 MI Technovation with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Technovation and Malaysia Steel.
Diversification Opportunities for MI Technovation and Malaysia Steel
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 5286 and Malaysia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MI Technovation 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 MI Technovation 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 MI Technovation 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 MI Technovation i.e., MI Technovation and Malaysia Steel go up and down completely randomly.
Pair Corralation between MI Technovation and Malaysia Steel
Assuming the 90 days trading horizon MI Technovation Bhd is expected to generate 1.09 times more return on investment than Malaysia Steel. However, MI Technovation is 1.09 times more volatile than Malaysia Steel Works. It trades about 0.05 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about 0.0 per unit of risk. If you would invest 136.00 in MI Technovation Bhd on September 5, 2024 and sell it today you would earn a total of 75.00 from holding MI Technovation Bhd or generate 55.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Technovation Bhd vs. Malaysia Steel Works
Performance |
| Timeline |
| MI Technovation Bhd |
| Malaysia Steel Works |
MI Technovation and Malaysia Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Technovation and Malaysia Steel
The main advantage of trading using opposite MI Technovation and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Technovation 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.| MI Technovation vs. Minetech Resources Bhd | MI Technovation vs. Swift Haulage Bhd | MI Technovation vs. Insas Bhd | MI Technovation vs. Bina Darulaman Bhd |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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