Correlation Between Choo Bee and Steel Hawk
Can any of the company-specific risk be diversified away by investing in both Choo Bee and Steel Hawk 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 Choo Bee and Steel Hawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Steel Hawk Berhad, you can compare the effects of market volatilities on Choo Bee and Steel Hawk 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 Choo Bee with a short position of Steel Hawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Steel Hawk.
Diversification Opportunities for Choo Bee and Steel Hawk
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choo and Steel is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Steel Hawk Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Hawk Berhad and Choo Bee 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 Choo Bee Metal are associated (or correlated) with Steel Hawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Hawk Berhad has no effect on the direction of Choo Bee i.e., Choo Bee and Steel Hawk go up and down completely randomly.
Pair Corralation between Choo Bee and Steel Hawk
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Steel Hawk. But the stock apears to be less risky and, when comparing its historical volatility, Choo Bee Metal is 10.7 times less risky than Steel Hawk. The stock trades about -0.06 of its potential returns per unit of risk. The Steel Hawk Berhad is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Steel Hawk Berhad on November 2, 2024 and sell it today you would earn a total of 34.00 from holding Steel Hawk Berhad or generate 309.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choo Bee Metal vs. Steel Hawk Berhad
Performance |
| Timeline |
| Choo Bee Metal |
| Steel Hawk Berhad |
Choo Bee and Steel Hawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Steel Hawk
The main advantage of trading using opposite Choo Bee and Steel Hawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, Steel Hawk 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 Steel Hawk will offset losses from the drop in Steel Hawk's long position.| Choo Bee vs. Binasat Communications Bhd | Choo Bee vs. Cosmos Technology International | Choo Bee vs. YX Precious Metals | Choo Bee vs. PMB Technology Bhd |
| Steel Hawk vs. Sunzen Biotech Bhd | Steel Hawk vs. Systech Bhd | Steel Hawk vs. Cosmos Technology International | Steel Hawk vs. CPE Technology 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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