Correlation Between Choo Bee and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Choo Bee and CSC Steel 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 CSC Steel 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 CSC Steel Holdings, you can compare the effects of market volatilities on Choo Bee and CSC Steel 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 CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and CSC Steel.
Diversification Opportunities for Choo Bee and CSC Steel
Very weak diversification
The 3 months correlation between Choo and CSC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and CSC Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSC Steel Holdings 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 CSC Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSC Steel Holdings has no effect on the direction of Choo Bee i.e., Choo Bee and CSC Steel go up and down completely randomly.
Pair Corralation between Choo Bee and CSC Steel
Assuming the 90 days trading horizon Choo Bee Metal is expected to generate 1.48 times more return on investment than CSC Steel. However, Choo Bee is 1.48 times more volatile than CSC Steel Holdings. It trades about -0.04 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about -0.13 per unit of risk. If you would invest 70.00 in Choo Bee Metal on October 25, 2024 and sell it today you would lose (1.00) from holding Choo Bee Metal or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Choo Bee Metal vs. CSC Steel Holdings
Performance |
| Timeline |
| Choo Bee Metal |
| CSC Steel Holdings |
Choo Bee and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and CSC Steel
The main advantage of trading using opposite Choo Bee and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee position performs unexpectedly, CSC Steel 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 CSC Steel will offset losses from the drop in CSC Steel's long position.| Choo Bee vs. Press Metal Bhd | Choo Bee vs. PMB Technology Bhd | Choo Bee vs. Pantech Group Holdings | Choo Bee vs. CSC Steel Holdings |
| CSC Steel vs. Resintech Bhd | CSC Steel vs. Apollo Food Holdings | CSC Steel vs. Choo Bee Metal | CSC Steel vs. Kawan Food 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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