Correlation Between Lysaght Galvanized and Tenaga Nasional
Can any of the company-specific risk be diversified away by investing in both Lysaght Galvanized and Tenaga Nasional 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 Lysaght Galvanized and Tenaga Nasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lysaght Galvanized Steel and Tenaga Nasional Bhd, you can compare the effects of market volatilities on Lysaght Galvanized and Tenaga Nasional 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 Lysaght Galvanized with a short position of Tenaga Nasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysaght Galvanized and Tenaga Nasional.
Diversification Opportunities for Lysaght Galvanized and Tenaga Nasional
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lysaght and Tenaga is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lysaght Galvanized Steel and Tenaga Nasional Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenaga Nasional Bhd and Lysaght Galvanized 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 Lysaght Galvanized Steel are associated (or correlated) with Tenaga Nasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenaga Nasional Bhd has no effect on the direction of Lysaght Galvanized i.e., Lysaght Galvanized and Tenaga Nasional go up and down completely randomly.
Pair Corralation between Lysaght Galvanized and Tenaga Nasional
Assuming the 90 days trading horizon Lysaght Galvanized Steel is expected to generate 3.08 times more return on investment than Tenaga Nasional. However, Lysaght Galvanized is 3.08 times more volatile than Tenaga Nasional Bhd. It trades about 0.07 of its potential returns per unit of risk. Tenaga Nasional Bhd is currently generating about 0.14 per unit of risk. If you would invest 219.00 in Lysaght Galvanized Steel on August 27, 2024 and sell it today you would earn a total of 117.00 from holding Lysaght Galvanized Steel or generate 53.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Lysaght Galvanized Steel vs. Tenaga Nasional Bhd
Performance |
| Timeline |
| Lysaght Galvanized Steel |
| Tenaga Nasional Bhd |
Lysaght Galvanized and Tenaga Nasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lysaght Galvanized and Tenaga Nasional
The main advantage of trading using opposite Lysaght Galvanized and Tenaga Nasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lysaght Galvanized position performs unexpectedly, Tenaga Nasional 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 Tenaga Nasional will offset losses from the drop in Tenaga Nasional's long position.| Lysaght Galvanized vs. Press Metal Bhd | Lysaght Galvanized vs. Southern Steel Bhd | Lysaght Galvanized vs. Eonmetall Group Bhd |
| Tenaga Nasional vs. HeiTech Padu Bhd | Tenaga Nasional vs. Lysaght Galvanized Steel | Tenaga Nasional vs. Digistar Bhd | Tenaga Nasional vs. Swift Haulage 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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