Correlation Between Coraza Integrated and Malaysia Steel

Can any of the company-specific risk be diversified away by investing in both Coraza Integrated and Malaysia 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 Coraza Integrated and Malaysia Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coraza Integrated Technology and Malaysia Steel Works, you can compare the effects of market volatilities on Coraza Integrated and Malaysia 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 Coraza Integrated with a short position of Malaysia Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coraza Integrated and Malaysia Steel.

Diversification Opportunities for Coraza Integrated and Malaysia Steel

0.09

Correlation Coefficient

Coraza Integrated  Malaysia Steel

Significant diversification

The 3 months correlation between Coraza and Malaysia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Coraza Integrated Technology and Malaysia Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysia Steel Works and Coraza Integrated 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 Coraza Integrated Technology are associated (or correlated) with Malaysia Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysia Steel Works has no effect on the direction of Coraza Integrated i.e., Coraza Integrated and Malaysia Steel go up and down completely randomly.

Pair Corralation between Coraza Integrated and Malaysia Steel

Assuming the 90 days trading horizon Coraza Integrated Technology is expected to generate 2.64 times more return on investment than Malaysia Steel. However, Coraza Integrated is 2.64 times more volatile than Malaysia Steel Works. It trades about 0.12 of its potential returns per unit of risk. Malaysia Steel Works is currently generating about 0.01 per unit of risk. If you would invest  40.00  in Coraza Integrated Technology on September 15, 2024 and sell it today you would earn a total of  16.00  from holding Coraza Integrated Technology or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Coraza Integrated Technology  vs.  Malaysia Steel Works

Coraza Integrated

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coraza Integrated Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Coraza Integrated disclosed solid returns over the last few months and may actually be approaching a breakup point.

Malaysia Steel Works

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malaysia Steel Works has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Malaysia Steel is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Coraza Integrated and Malaysia Steel

The main advantage of trading using opposite Coraza Integrated and Malaysia Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coraza Integrated position performs unexpectedly, Malaysia 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 Malaysia Steel will offset losses from the drop in Malaysia Steel's long position.

The idea behind Coraza Integrated Technology and Malaysia Steel Works pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.