Correlation Between PIE Industrial and Leader Steel
Can any of the company-specific risk be diversified away by investing in both PIE Industrial and Leader 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 PIE Industrial and Leader Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIE Industrial Bhd and Leader Steel Holdings, you can compare the effects of market volatilities on PIE Industrial and Leader 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 PIE Industrial with a short position of Leader Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIE Industrial and Leader Steel.
Diversification Opportunities for PIE Industrial and Leader Steel
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between PIE and Leader is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding PIE Industrial Bhd and Leader Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Steel Holdings and PIE 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 PIE Industrial Bhd are associated (or correlated) with Leader Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Steel Holdings has no effect on the direction of PIE Industrial i.e., PIE Industrial and Leader Steel go up and down completely randomly.
Pair Corralation between PIE Industrial and Leader Steel
Assuming the 90 days trading horizon PIE Industrial Bhd is expected to generate 0.78 times more return on investment than Leader Steel. However, PIE Industrial Bhd is 1.28 times less risky than Leader Steel. It trades about 0.14 of its potential returns per unit of risk. Leader Steel Holdings is currently generating about 0.02 per unit of risk. If you would invest 534.00 in PIE Industrial Bhd on August 24, 2024 and sell it today you would earn a total of 41.00 from holding PIE Industrial Bhd or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PIE Industrial Bhd vs. Leader Steel Holdings
Performance |
| Timeline |
| PIE Industrial Bhd |
| Leader Steel Holdings |
PIE Industrial and Leader Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIE Industrial and Leader Steel
The main advantage of trading using opposite PIE Industrial and Leader Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIE Industrial position performs unexpectedly, Leader 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 Leader Steel will offset losses from the drop in Leader Steel's long position.| PIE Industrial vs. Greatech Technology Bhd | PIE Industrial vs. Uwc Bhd | PIE Industrial vs. Genetec Technology Bhd | PIE Industrial vs. Dufu Tech Corp |
| Leader Steel vs. Press Metal Bhd | Leader Steel vs. PMB Technology Bhd | Leader Steel vs. Pantech Group Holdings | Leader Steel vs. CSC Steel Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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