Correlation Between Southern Steel and Senheng New
Can any of the company-specific risk be diversified away by investing in both Southern Steel and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on Southern Steel and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Steel and Senheng New.
Diversification Opportunities for Southern Steel and Senheng New
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and Senheng is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southern Steel Bhd and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Southern Steel i.e., Southern Steel and Senheng New go up and down completely randomly.
Pair Corralation between Southern Steel and Senheng New
Assuming the 90 days trading horizon Southern Steel Bhd is expected to generate 1.04 times more return on investment than Senheng New. However, Southern Steel is 1.04 times more volatile than Senheng New Retail. It trades about -0.02 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.04 per unit of risk. If you would invest 52.00 in Southern Steel Bhd on November 28, 2024 and sell it today you would lose (6.00) from holding Southern Steel Bhd or give up 11.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Steel Bhd vs. Senheng New Retail
Performance |
| Timeline |
| Southern Steel Bhd |
| Senheng New Retail |
Southern Steel and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Steel and Senheng New
The main advantage of trading using opposite Southern Steel and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Steel position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New'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 |
| Senheng New vs. Privasia Technology Bhd | Senheng New vs. KPJ Healthcare Bhd | Senheng New vs. Eversafe Rubber Bhd | Senheng New vs. Lyc Healthcare 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 CEOs Directory module to screen CEOs from public companies around the world.
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