Correlation Between Resintech Bhd and Malaysia Steel
Can any of the company-specific risk be diversified away by investing in both Resintech Bhd and Malaysia 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 Resintech Bhd and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resintech Bhd and Malaysia Steel Works, you can compare the effects of market volatilities on Resintech Bhd and Malaysia 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 Resintech Bhd with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and Malaysia Steel.
Diversification Opportunities for Resintech Bhd and Malaysia Steel
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Resintech and Malaysia is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works and Resintech Bhd 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 Resintech Bhd are associated (or correlated) with Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of Resintech Bhd i.e., Resintech Bhd and Malaysia Steel go up and down completely randomly.
Pair Corralation between Resintech Bhd and Malaysia Steel
Assuming the 90 days trading horizon Resintech Bhd is expected to generate 0.87 times more return on investment than Malaysia Steel. However, Resintech Bhd is 1.15 times less risky than Malaysia Steel. It trades about 0.08 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about -0.02 per unit of risk. If you would invest 56.00 in Resintech Bhd on September 5, 2024 and sell it today you would earn a total of 11.00 from holding Resintech Bhd or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resintech Bhd vs. Malaysia Steel Works
Performance |
| Timeline |
| Resintech Bhd |
| Malaysia Steel Works |
Resintech Bhd and Malaysia Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resintech Bhd and Malaysia Steel
The main advantage of trading using opposite Resintech Bhd and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resintech Bhd position performs unexpectedly, Malaysia 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 Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.| Resintech Bhd vs. CSC Steel Holdings | Resintech Bhd vs. Sports Toto Berhad | Resintech Bhd vs. Impiana Hotels Bhd | Resintech Bhd vs. MClean Technologies Bhd |
| Malaysia Steel vs. Resintech Bhd | Malaysia Steel vs. MI Technovation Bhd | Malaysia Steel vs. Press Metal Bhd | Malaysia Steel vs. Mercury Industries 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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