Correlation Between Southern Steel and Uchi Technologies
Can any of the company-specific risk be diversified away by investing in both Southern Steel and Uchi Technologies 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 Uchi Technologies 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 Uchi Technologies Bhd, you can compare the effects of market volatilities on Southern Steel and Uchi Technologies 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 Uchi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Steel and Uchi Technologies.
Diversification Opportunities for Southern Steel and Uchi Technologies
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southern and Uchi is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Southern Steel Bhd and Uchi Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uchi Technologies 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 Uchi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uchi Technologies Bhd has no effect on the direction of Southern Steel i.e., Southern Steel and Uchi Technologies go up and down completely randomly.
Pair Corralation between Southern Steel and Uchi Technologies
Assuming the 90 days trading horizon Southern Steel Bhd is expected to under-perform the Uchi Technologies. In addition to that, Southern Steel is 2.44 times more volatile than Uchi Technologies Bhd. It trades about -0.25 of its total potential returns per unit of risk. Uchi Technologies Bhd is currently generating about 0.08 per unit of volatility. If you would invest 388.00 in Uchi Technologies Bhd on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Uchi Technologies Bhd or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Steel Bhd vs. Uchi Technologies Bhd
Performance |
| Timeline |
| Southern Steel Bhd |
| Uchi Technologies Bhd |
Southern Steel and Uchi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Steel and Uchi Technologies
The main advantage of trading using opposite Southern Steel and Uchi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Steel position performs unexpectedly, Uchi Technologies 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 Uchi Technologies will offset losses from the drop in Uchi Technologies' 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 |
| Uchi Technologies vs. British American Tobacco | Uchi Technologies vs. BP Plastics Holding | Uchi Technologies vs. IHH Healthcare Bhd | Uchi Technologies vs. Steel Hawk Berhad |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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