Correlation Between Southern Steel and Iskandar Waterfront
Can any of the company-specific risk be diversified away by investing in both Southern Steel and Iskandar Waterfront 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 Iskandar Waterfront 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 Iskandar Waterfront City, you can compare the effects of market volatilities on Southern Steel and Iskandar Waterfront 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 Iskandar Waterfront. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Steel and Iskandar Waterfront.
Diversification Opportunities for Southern Steel and Iskandar Waterfront
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Iskandar is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Southern Steel Bhd and Iskandar Waterfront City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iskandar Waterfront City 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 Iskandar Waterfront. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iskandar Waterfront City has no effect on the direction of Southern Steel i.e., Southern Steel and Iskandar Waterfront go up and down completely randomly.
Pair Corralation between Southern Steel and Iskandar Waterfront
Assuming the 90 days trading horizon Southern Steel is expected to generate 4.07 times less return on investment than Iskandar Waterfront. But when comparing it to its historical volatility, Southern Steel Bhd is 1.04 times less risky than Iskandar Waterfront. It trades about 0.01 of its potential returns per unit of risk. Iskandar Waterfront City is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Iskandar Waterfront City on September 12, 2024 and sell it today you would earn a total of 29.00 from holding Iskandar Waterfront City or generate 107.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Southern Steel Bhd vs. Iskandar Waterfront City
Performance |
| Timeline |
| Southern Steel Bhd |
| Iskandar Waterfront City |
Southern Steel and Iskandar Waterfront Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Steel and Iskandar Waterfront
The main advantage of trading using opposite Southern Steel and Iskandar Waterfront positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Steel position performs unexpectedly, Iskandar Waterfront 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 Iskandar Waterfront will offset losses from the drop in Iskandar Waterfront's long position.| Southern Steel vs. Press Metal Bhd | Southern Steel vs. PMB Technology Bhd | Southern Steel vs. Pantech Group Holdings | Southern Steel vs. CSC Steel Holdings |
| Iskandar Waterfront vs. Tex Cycle Technology | Iskandar Waterfront vs. Southern Steel Bhd | Iskandar Waterfront vs. Senheng New Retail | Iskandar Waterfront vs. Diversified Gateway Solutions |
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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