Correlation Between Impiana Hotels and Southern Steel
Can any of the company-specific risk be diversified away by investing in both Impiana Hotels and Southern 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 Southern 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 Southern Steel Bhd, you can compare the effects of market volatilities on Impiana Hotels and Southern 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 Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impiana Hotels and Southern Steel.
Diversification Opportunities for Impiana Hotels and Southern Steel
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Impiana and Southern is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Impiana Hotels Bhd and Southern Steel Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Steel Bhd 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 Southern Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Steel Bhd has no effect on the direction of Impiana Hotels i.e., Impiana Hotels and Southern Steel go up and down completely randomly.
Pair Corralation between Impiana Hotels and Southern Steel
Assuming the 90 days trading horizon Impiana Hotels Bhd is expected to generate 1.38 times more return on investment than Southern Steel. However, Impiana Hotels is 1.38 times more volatile than Southern Steel Bhd. It trades about 0.06 of its potential returns per unit of risk. Southern Steel Bhd is currently generating about 0.02 per unit of risk. If you would invest 9.50 in Impiana Hotels Bhd on August 24, 2024 and sell it today you would earn a total of 11.50 from holding Impiana Hotels Bhd or generate 121.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impiana Hotels Bhd vs. Southern Steel Bhd
Performance |
| Timeline |
| Impiana Hotels Bhd |
| Southern Steel Bhd |
Impiana Hotels and Southern Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impiana Hotels and Southern Steel
The main advantage of trading using opposite Impiana Hotels and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impiana Hotels position performs unexpectedly, Southern 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 Southern Steel will offset losses from the drop in Southern Steel's long position.| Impiana Hotels vs. Sports Toto Berhad | Impiana Hotels vs. Digistar Bhd | Impiana Hotels vs. Minetech Resources Bhd | Impiana Hotels vs. OpenSys M Bhd |
| Southern Steel vs. Press Metal Bhd | Southern Steel vs. PMB Technology Bhd | Southern Steel vs. Pantech Group Holdings | Southern 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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