Correlation Between Leader Steel and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both Leader Steel and Binasat Communications 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 Leader Steel and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leader Steel Holdings and Binasat Communications Bhd, you can compare the effects of market volatilities on Leader Steel and Binasat Communications 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 Leader Steel with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and Binasat Communications.
Diversification Opportunities for Leader Steel and Binasat Communications
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leader and Binasat is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Leader Steel 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 Leader Steel Holdings are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Leader Steel i.e., Leader Steel and Binasat Communications go up and down completely randomly.
Pair Corralation between Leader Steel and Binasat Communications
Assuming the 90 days trading horizon Leader Steel Holdings is expected to generate 0.95 times more return on investment than Binasat Communications. However, Leader Steel Holdings is 1.06 times less risky than Binasat Communications. It trades about -0.01 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.05 per unit of risk. If you would invest 46.00 in Leader Steel Holdings on November 7, 2024 and sell it today you would lose (6.00) from holding Leader Steel Holdings or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Steel Holdings vs. Binasat Communications Bhd
Performance |
| Timeline |
| Leader Steel Holdings |
| Binasat Communications |
Leader Steel and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Steel and Binasat Communications
The main advantage of trading using opposite Leader Steel and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Steel position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| Leader Steel vs. Icon Offshore Bhd | Leader Steel vs. Uchi Technologies Bhd | Leader Steel vs. Globetronics Tech Bhd | Leader Steel vs. Public Packages Holdings |
| Binasat Communications vs. Riverview Rubber Estates | Binasat Communications vs. Supercomnet Technologies Bhd | Binasat Communications vs. Icon Offshore Bhd | Binasat Communications vs. TAS Offshore 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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