Correlation Between Leader Steel and Top Glove
Can any of the company-specific risk be diversified away by investing in both Leader Steel and Top Glove 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 Top Glove 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 Top Glove, you can compare the effects of market volatilities on Leader Steel and Top Glove 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 Top Glove. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and Top Glove.
Diversification Opportunities for Leader Steel and Top Glove
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leader and Top is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and Top Glove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Glove 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 Top Glove. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Glove has no effect on the direction of Leader Steel i.e., Leader Steel and Top Glove go up and down completely randomly.
Pair Corralation between Leader Steel and Top Glove
Assuming the 90 days trading horizon Leader Steel Holdings is expected to under-perform the Top Glove. In addition to that, Leader Steel is 1.4 times more volatile than Top Glove. It trades about -0.13 of its total potential returns per unit of risk. Top Glove is currently generating about 0.18 per unit of volatility. If you would invest 108.00 in Top Glove on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Top Glove or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leader Steel Holdings vs. Top Glove
Performance |
| Timeline |
| Leader Steel Holdings |
| Top Glove |
Leader Steel and Top Glove Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Steel and Top Glove
The main advantage of trading using opposite Leader Steel and Top Glove positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Steel position performs unexpectedly, Top Glove 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 Top Glove will offset losses from the drop in Top Glove's long position.| Leader Steel vs. Press Metal Bhd | Leader Steel vs. CSC Steel Holdings | Leader Steel vs. Malaysia Steel Works | Leader Steel vs. Choo Bee Metal |
| Top Glove vs. Malaysia Steel Works | Top Glove vs. Media Prima Bhd | Top Glove vs. Leader Steel Holdings | Top Glove vs. Hong Leong Bank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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