Correlation Between PGF Capital and CSC Steel
Can any of the company-specific risk be diversified away by investing in both PGF Capital 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 PGF Capital and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGF Capital Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on PGF Capital 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 PGF Capital with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGF Capital and CSC Steel.
Diversification Opportunities for PGF Capital and CSC Steel
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PGF and CSC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PGF Capital 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 PGF Capital 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 PGF Capital 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 PGF Capital i.e., PGF Capital and CSC Steel go up and down completely randomly.
Pair Corralation between PGF Capital and CSC Steel
Assuming the 90 days trading horizon PGF Capital Bhd is expected to generate 1.9 times more return on investment than CSC Steel. However, PGF Capital is 1.9 times more volatile than CSC Steel Holdings. It trades about 0.1 of its potential returns per unit of risk. CSC Steel Holdings is currently generating about 0.01 per unit of risk. If you would invest 130.00 in PGF Capital Bhd on September 14, 2024 and sell it today you would earn a total of 90.00 from holding PGF Capital Bhd or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
PGF Capital Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| PGF Capital Bhd |
| CSC Steel Holdings |
PGF Capital and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGF Capital and CSC Steel
The main advantage of trading using opposite PGF Capital and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGF Capital 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.| PGF Capital vs. Globetronics Tech Bhd | PGF Capital vs. MI Technovation Bhd | PGF Capital vs. JF Technology BHD | PGF Capital vs. EA Technique M |
| CSC Steel vs. Press Metal Bhd | CSC Steel vs. PMB Technology Bhd | CSC Steel vs. Pantech Group Holdings | CSC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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