Correlation Between Binasat Communications and CSC Steel
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and CSC Steel 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 Binasat Communications and CSC Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and CSC Steel Holdings, you can compare the effects of market volatilities on Binasat Communications and CSC Steel 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 Binasat Communications with a short position of CSC Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and CSC Steel.
Diversification Opportunities for Binasat Communications and CSC Steel
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and CSC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and CSC Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSC Steel Holdings and Binasat Communications 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 Binasat Communications Bhd are associated (or correlated) with CSC Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSC Steel Holdings has no effect on the direction of Binasat Communications i.e., Binasat Communications and CSC Steel go up and down completely randomly.
Pair Corralation between Binasat Communications and CSC Steel
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the CSC Steel. In addition to that, Binasat Communications is 3.0 times more volatile than CSC Steel Holdings. It trades about -0.07 of its total potential returns per unit of risk. CSC Steel Holdings is currently generating about -0.08 per unit of volatility. If you would invest 122.00 in CSC Steel Holdings on September 26, 2024 and sell it today you would lose (6.00) from holding CSC Steel Holdings or give up 4.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Binasat Communications Bhd vs. CSC Steel Holdings
Performance |
Timeline |
Binasat Communications |
CSC Steel Holdings |
Binasat Communications and CSC Steel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Binasat Communications and CSC Steel
The main advantage of trading using opposite Binasat Communications and CSC Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, CSC Steel 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 CSC Steel will offset losses from the drop in CSC Steel's long position.Binasat Communications vs. Axiata Group Bhd | Binasat Communications vs. Telekom Malaysia Bhd | Binasat Communications vs. TIME Dotcom Bhd | Binasat Communications vs. Scientex Bhd |
CSC Steel vs. Press Metal Bhd | CSC Steel vs. PMB Technology Bhd | CSC Steel vs. Pantech Group Holdings | CSC Steel 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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