Correlation Between Impiana Hotels and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Impiana Hotels 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 Impiana Hotels and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impiana Hotels Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on Impiana Hotels 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 Impiana Hotels with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impiana Hotels and CSC Steel.
Diversification Opportunities for Impiana Hotels and CSC Steel
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Impiana and CSC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Impiana Hotels Bhd 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 Impiana Hotels 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 Impiana Hotels Bhd 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 Impiana Hotels i.e., Impiana Hotels and CSC Steel go up and down completely randomly.
Pair Corralation between Impiana Hotels and CSC Steel
Assuming the 90 days trading horizon Impiana Hotels Bhd is expected to generate 3.81 times more return on investment than CSC Steel. However, Impiana Hotels is 3.81 times more volatile than CSC Steel Holdings. It trades about 0.02 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about -0.09 per unit of risk. If you would invest 21.00 in Impiana Hotels Bhd on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Impiana Hotels Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impiana Hotels Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| Impiana Hotels Bhd |
| CSC Steel Holdings |
Impiana Hotels and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impiana Hotels and CSC Steel
The main advantage of trading using opposite Impiana Hotels and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impiana Hotels 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.| Impiana Hotels vs. Digistar Bhd | Impiana Hotels vs. Minetech Resources Bhd | Impiana Hotels vs. OpenSys M Bhd | Impiana Hotels vs. Insas 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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