Correlation Between Leader Steel and YX Precious
Can any of the company-specific risk be diversified away by investing in both Leader Steel and YX Precious 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 YX Precious 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 YX Precious Metals, you can compare the effects of market volatilities on Leader Steel and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and YX Precious.
Diversification Opportunities for Leader Steel and YX Precious
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leader and 0250 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of Leader Steel i.e., Leader Steel and YX Precious go up and down completely randomly.
Pair Corralation between Leader Steel and YX Precious
Assuming the 90 days trading horizon Leader Steel is expected to generate 2.79 times less return on investment than YX Precious. But when comparing it to its historical volatility, Leader Steel Holdings is 1.67 times less risky than YX Precious. It trades about 0.01 of its potential returns per unit of risk. YX Precious Metals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 24.00 in YX Precious Metals on October 10, 2024 and sell it today you would earn a total of 0.00 from holding YX Precious Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Steel Holdings vs. YX Precious Metals
Performance |
| Timeline |
| Leader Steel Holdings |
| YX Precious Metals |
Leader Steel and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Steel and YX Precious
The main advantage of trading using opposite Leader Steel and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Steel position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| Leader Steel vs. Minetech Resources Bhd | Leader Steel vs. MClean Technologies Bhd | Leader Steel vs. K One Technology Bhd | Leader Steel vs. Star Media Group |
| YX Precious vs. Eonmetall Group Bhd | YX Precious vs. Senheng New Retail | YX Precious vs. Binasat Communications Bhd | YX Precious vs. Central Industrial Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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