Correlation Between Mercury Industries and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Mercury Industries 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 Mercury Industries and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercury Industries Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on Mercury Industries 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 Mercury Industries with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercury Industries and CSC Steel.
Diversification Opportunities for Mercury Industries and CSC Steel
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mercury and CSC is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mercury Industries 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 Mercury Industries 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 Mercury Industries 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 Mercury Industries i.e., Mercury Industries and CSC Steel go up and down completely randomly.
Pair Corralation between Mercury Industries and CSC Steel
Assuming the 90 days trading horizon Mercury Industries Bhd is expected to under-perform the CSC Steel. In addition to that, Mercury Industries is 2.24 times more volatile than CSC Steel Holdings. It trades about -0.19 of its total potential returns per unit of risk. CSC Steel Holdings is currently generating about -0.07 per unit of volatility. If you would invest 119.00 in CSC Steel Holdings on August 31, 2024 and sell it today you would lose (2.00) from holding CSC Steel Holdings or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercury Industries Bhd vs. CSC Steel Holdings
Performance |
| Timeline |
| Mercury Industries Bhd |
| CSC Steel Holdings |
Mercury Industries and CSC Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercury Industries and CSC Steel
The main advantage of trading using opposite Mercury Industries and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercury Industries 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.| Mercury Industries vs. YX Precious Metals | Mercury Industries vs. Kossan Rubber Industries | Mercury Industries vs. Binasat Communications Bhd | Mercury Industries vs. Aeon Credit Service |
| CSC Steel vs. PMB Technology Bhd | CSC Steel vs. Pantech Group Holdings | CSC Steel vs. Coraza Integrated Technology | CSC Steel vs. Choo Bee Metal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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