Correlation Between Leader Steel and Deleum Bhd
Can any of the company-specific risk be diversified away by investing in both Leader Steel and Deleum Bhd 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 Deleum Bhd 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 Deleum Bhd, you can compare the effects of market volatilities on Leader Steel and Deleum Bhd 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 Deleum Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and Deleum Bhd.
Diversification Opportunities for Leader Steel and Deleum Bhd
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leader and Deleum is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and Deleum Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deleum Bhd 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 Deleum Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deleum Bhd has no effect on the direction of Leader Steel i.e., Leader Steel and Deleum Bhd go up and down completely randomly.
Pair Corralation between Leader Steel and Deleum Bhd
Assuming the 90 days trading horizon Leader Steel is expected to generate 2.61 times less return on investment than Deleum Bhd. In addition to that, Leader Steel is 1.33 times more volatile than Deleum Bhd. It trades about 0.02 of its total potential returns per unit of risk. Deleum Bhd is currently generating about 0.07 per unit of volatility. If you would invest 86.00 in Deleum Bhd on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Deleum Bhd or generate 60.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.42% |
| Values | Daily Returns |
Leader Steel Holdings vs. Deleum Bhd
Performance |
| Timeline |
| Leader Steel Holdings |
| Deleum Bhd |
Leader Steel and Deleum Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Steel and Deleum Bhd
The main advantage of trading using opposite Leader Steel and Deleum Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Steel position performs unexpectedly, Deleum Bhd 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 Deleum Bhd will offset losses from the drop in Deleum Bhd'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 |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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