Correlation Between MQ Technology and Steel Hawk

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

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

Diversification Opportunities for MQ Technology and Steel Hawk

0.67

Correlation Coefficient

MQ Technology  Steel Hawk

Poor diversification

The 3 months correlation between 0070 and Steel is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MQ Technology Bhd and Steel Hawk Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Hawk Berhad and MQ Technology 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 MQ Technology Bhd are associated (or correlated) with Steel Hawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Hawk Berhad has no effect on the direction of MQ Technology i.e., MQ Technology and Steel Hawk go up and down completely randomly.

Pair Corralation between MQ Technology and Steel Hawk

Assuming the 90 days trading horizon MQ Technology Bhd is expected to under-perform the Steel Hawk. In addition to that, MQ Technology is 3.0 times more volatile than Steel Hawk Berhad. It trades about -0.05 of its total potential returns per unit of risk. Steel Hawk Berhad is currently generating about 0.03 per unit of volatility. If you would invest  45.00  in Steel Hawk Berhad on December 24, 2024 and sell it today you would earn a total of  1.00  from holding Steel Hawk Berhad or generate 2.22% return on investment over 90 days.

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

MQ Technology Bhd  vs.  Steel Hawk Berhad

MQ Technology Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days MQ Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Steel Hawk Berhad

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Hawk Berhad are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Steel Hawk 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 MQ Technology and Steel Hawk

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

The idea behind MQ Technology Bhd and Steel Hawk Berhad 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.