Correlation Between CB Industrial and Mycron Steel
Can any of the company-specific risk be diversified away by investing in both CB Industrial and Mycron 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 CB Industrial and Mycron Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CB Industrial Product and Mycron Steel Bhd, you can compare the effects of market volatilities on CB Industrial and Mycron 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 CB Industrial with a short position of Mycron Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Industrial and Mycron Steel.
Diversification Opportunities for CB Industrial and Mycron Steel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 7076 and Mycron is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CB Industrial Product and Mycron Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mycron Steel Bhd and CB Industrial 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 CB Industrial Product are associated (or correlated) with Mycron Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mycron Steel Bhd has no effect on the direction of CB Industrial i.e., CB Industrial and Mycron Steel go up and down completely randomly.
Pair Corralation between CB Industrial and Mycron Steel
Assuming the 90 days trading horizon CB Industrial Product is expected to generate 0.32 times more return on investment than Mycron Steel. However, CB Industrial Product is 3.11 times less risky than Mycron Steel. It trades about 0.19 of its potential returns per unit of risk. Mycron Steel Bhd is currently generating about 0.02 per unit of risk. If you would invest 128.00 in CB Industrial Product on August 31, 2024 and sell it today you would earn a total of 6.00 from holding CB Industrial Product or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CB Industrial Product vs. Mycron Steel Bhd
Performance |
| Timeline |
| CB Industrial Product |
| Mycron Steel Bhd |
CB Industrial and Mycron Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Industrial and Mycron Steel
The main advantage of trading using opposite CB Industrial and Mycron Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Industrial position performs unexpectedly, Mycron 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 Mycron Steel will offset losses from the drop in Mycron Steel's long position.| CB Industrial vs. Greatech Technology Bhd | CB Industrial vs. Genetec Technology Bhd | CB Industrial vs. PIE Industrial Bhd | CB Industrial vs. Dufu Tech Corp |
| Mycron Steel vs. PMB Technology Bhd | Mycron Steel vs. Pantech Group Holdings | Mycron Steel vs. CSC Steel Holdings | Mycron Steel vs. Coraza Integrated Technology |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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