Correlation Between Press Metal and Southern Steel
Can any of the company-specific risk be diversified away by investing in both Press Metal 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 Press Metal and Southern Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Press Metal Bhd and Southern Steel Bhd, you can compare the effects of market volatilities on Press Metal 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 Press Metal with a short position of Southern Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Press Metal and Southern Steel.
Diversification Opportunities for Press Metal and Southern Steel
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Press and Southern is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Press Metal 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 Press Metal 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 Press Metal 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 Press Metal i.e., Press Metal and Southern Steel go up and down completely randomly.
Pair Corralation between Press Metal and Southern Steel
Assuming the 90 days trading horizon Press Metal Bhd is expected to generate 1.03 times more return on investment than Southern Steel. However, Press Metal is 1.03 times more volatile than Southern Steel Bhd. It trades about 0.04 of its potential returns per unit of risk. Southern Steel Bhd is currently generating about -0.05 per unit of risk. If you would invest 483.00 in Press Metal Bhd on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Press Metal Bhd or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Press Metal Bhd vs. Southern Steel Bhd
Performance |
| Timeline |
| Press Metal Bhd |
| Southern Steel Bhd |
Press Metal and Southern Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Press Metal and Southern Steel
The main advantage of trading using opposite Press Metal and Southern Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Press Metal 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.| Press Metal vs. ONETECH SOLUTIONS HOLDINGS | Press Metal vs. Malayan Banking Bhd | Press Metal vs. Petronas Chemicals Group | Press Metal vs. Cloudpoint Technology Berhad |
| Southern Steel vs. Star Media Group | Southern Steel vs. Hong Leong Bank | Southern Steel vs. ECM Libra Financial | Southern Steel vs. Sports Toto Berhad |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |