Correlation Between Leader Steel and Steel Hawk
Can any of the company-specific risk be diversified away by investing in both Leader Steel and Steel Hawk 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 Steel Hawk 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 Steel Hawk Berhad, you can compare the effects of market volatilities on Leader Steel and Steel Hawk 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 Steel Hawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and Steel Hawk.
Diversification Opportunities for Leader Steel and Steel Hawk
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leader and Steel is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and Steel Hawk Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Hawk Berhad 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 Steel Hawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Hawk Berhad has no effect on the direction of Leader Steel i.e., Leader Steel and Steel Hawk go up and down completely randomly.
Pair Corralation between Leader Steel and Steel Hawk
Assuming the 90 days trading horizon Leader Steel Holdings is expected to under-perform the Steel Hawk. In addition to that, Leader Steel is 1.01 times more volatile than Steel Hawk Berhad. It trades about -0.04 of its total potential returns per unit of risk. Steel Hawk Berhad is currently generating about -0.04 per unit of volatility. If you would invest 45.00 in Steel Hawk Berhad on October 23, 2024 and sell it today you would lose (1.00) from holding Steel Hawk Berhad or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Steel Holdings vs. Steel Hawk Berhad
Performance |
| Timeline |
| Leader Steel Holdings |
| Steel Hawk Berhad |
Leader Steel and Steel Hawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Steel and Steel Hawk
The main advantage of trading using opposite Leader Steel and Steel Hawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Steel position performs unexpectedly, Steel Hawk 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 Steel Hawk will offset losses from the drop in Steel Hawk's long position.| Leader Steel vs. Press Metal Bhd | Leader Steel vs. PMB Technology Bhd | Leader Steel vs. Pantech Group Holdings | Leader Steel vs. CSC Steel Holdings |
| Steel Hawk vs. Riverview Rubber Estates | Steel Hawk vs. Melewar Industrial Group | Steel Hawk vs. Leader Steel Holdings | Steel Hawk vs. Southern Steel 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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