Correlation Between Southern Steel and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both Southern Steel and Icon Offshore 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 Icon Offshore 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 Icon Offshore Bhd, you can compare the effects of market volatilities on Southern Steel and Icon Offshore 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 Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Steel and Icon Offshore.
Diversification Opportunities for Southern Steel and Icon Offshore
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Southern and Icon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Southern Steel Bhd and Icon Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Offshore 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 Icon Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Offshore Bhd has no effect on the direction of Southern Steel i.e., Southern Steel and Icon Offshore go up and down completely randomly.
Pair Corralation between Southern Steel and Icon Offshore
Assuming the 90 days trading horizon Southern Steel Bhd is expected to under-perform the Icon Offshore. In addition to that, Southern Steel is 1.29 times more volatile than Icon Offshore Bhd. It trades about -0.25 of its total potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.12 per unit of volatility. If you would invest 99.00 in Icon Offshore Bhd on November 28, 2024 and sell it today you would earn a total of 3.00 from holding Icon Offshore Bhd or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Steel Bhd vs. Icon Offshore Bhd
Performance |
| Timeline |
| Southern Steel Bhd |
| Icon Offshore Bhd |
Southern Steel and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Steel and Icon Offshore
The main advantage of trading using opposite Southern Steel and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Steel position performs unexpectedly, Icon Offshore 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 Icon Offshore will offset losses from the drop in Icon Offshore's long position.| Southern Steel vs. Kawan Food Bhd | Southern Steel vs. Carlsberg Brewery Malaysia | Southern Steel vs. Cloudpoint Technology Berhad | Southern Steel vs. Choo Bee Metal |
| Icon Offshore vs. Media Prima Bhd | Icon Offshore vs. Datasonic Group Bhd | Icon Offshore vs. Sports Toto Berhad | Icon Offshore vs. Lotte Chemical Titan |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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