Correlation Between Maanshan Iron and YTLBerhad
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and YTLBerhad 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 Maanshan Iron and YTLBerhad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and YTL Berhad, you can compare the effects of market volatilities on Maanshan Iron and YTLBerhad 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 Maanshan Iron with a short position of YTLBerhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and YTLBerhad.
Diversification Opportunities for Maanshan Iron and YTLBerhad
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Maanshan and YTLBerhad is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and YTL Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Berhad and Maanshan Iron 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 Maanshan Iron Steel are associated (or correlated) with YTLBerhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Berhad has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and YTLBerhad go up and down completely randomly.
Pair Corralation between Maanshan Iron and YTLBerhad
Assuming the 90 days horizon Maanshan Iron Steel is expected to under-perform the YTLBerhad. In addition to that, Maanshan Iron is 1.64 times more volatile than YTL Berhad. It trades about -0.22 of its total potential returns per unit of risk. YTL Berhad is currently generating about 0.22 per unit of volatility. If you would invest 41.00 in YTL Berhad on September 3, 2024 and sell it today you would earn a total of 5.00 from holding YTL Berhad or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. YTL Berhad
Performance |
| Timeline |
| Maanshan Iron Steel |
| YTL Berhad |
Maanshan Iron and YTLBerhad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and YTLBerhad
The main advantage of trading using opposite Maanshan Iron and YTLBerhad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, YTLBerhad 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 YTLBerhad will offset losses from the drop in YTLBerhad's long position.| Maanshan Iron vs. Ta Chen Stainless | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Nucor Corp |
| YTLBerhad vs. Minerals Technologies | YTLBerhad vs. Olympic Steel | YTLBerhad vs. Sea | YTLBerhad vs. Cedar Realty Trust |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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