Correlation Between Southern Steel and Genetec Technology
Can any of the company-specific risk be diversified away by investing in both Southern Steel and Genetec Technology 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 Southern Steel and Genetec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Steel Bhd and Genetec Technology Bhd, you can compare the effects of market volatilities on Southern Steel and Genetec Technology 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 Southern Steel with a short position of Genetec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Steel and Genetec Technology.
Diversification Opportunities for Southern Steel and Genetec Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Southern and Genetec is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Southern Steel Bhd and Genetec Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetec Technology Bhd and Southern Steel 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 Southern Steel Bhd are associated (or correlated) with Genetec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetec Technology Bhd has no effect on the direction of Southern Steel i.e., Southern Steel and Genetec Technology go up and down completely randomly.
Pair Corralation between Southern Steel and Genetec Technology
Assuming the 90 days trading horizon Southern Steel Bhd is expected to generate 0.53 times more return on investment than Genetec Technology. However, Southern Steel Bhd is 1.88 times less risky than Genetec Technology. It trades about 0.0 of its potential returns per unit of risk. Genetec Technology Bhd is currently generating about -0.06 per unit of risk. If you would invest 58.00 in Southern Steel Bhd on September 5, 2024 and sell it today you would lose (4.00) from holding Southern Steel Bhd or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Steel Bhd vs. Genetec Technology Bhd
Performance |
| Timeline |
| Southern Steel Bhd |
| Genetec Technology Bhd |
Southern Steel and Genetec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Steel and Genetec Technology
The main advantage of trading using opposite Southern Steel and Genetec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Steel position performs unexpectedly, Genetec Technology 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 Genetec Technology will offset losses from the drop in Genetec Technology's long position.| Southern Steel vs. Pantech Group Holdings | Southern Steel vs. Choo Bee Metal | Southern Steel vs. Supercomnet Technologies Bhd | Southern Steel vs. ONETECH SOLUTIONS HOLDINGS |
| Genetec Technology vs. DC HEALTHCARE HOLDINGS | Genetec Technology vs. Press Metal Bhd | Genetec Technology vs. Mycron Steel Bhd | Genetec Technology vs. Southern Steel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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