Correlation Between Steel Hawk and SSF Home

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

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

Diversification Opportunities for Steel Hawk and SSF Home

-0.31

Correlation Coefficient

Steel Hawk  SSF Home

Very good diversification

The 3 months correlation between Steel and SSF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Steel Hawk Berhad and SSF Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSF Home Group and Steel Hawk 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 Steel Hawk Berhad are associated (or correlated) with SSF Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSF Home Group has no effect on the direction of Steel Hawk i.e., Steel Hawk and SSF Home go up and down completely randomly.

Pair Corralation between Steel Hawk and SSF Home

Assuming the 90 days trading horizon Steel Hawk is expected to generate 3.52 times less return on investment than SSF Home. In addition to that, Steel Hawk is 1.06 times more volatile than SSF Home Group. It trades about 0.03 of its total potential returns per unit of risk. SSF Home Group is currently generating about 0.1 per unit of volatility. If you would invest  34.00  in SSF Home Group on December 23, 2024 and sell it today you would earn a total of  4.00  from holding SSF Home Group or generate 11.76% return on investment over 90 days.

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

Steel Hawk Berhad  vs.  SSF Home Group

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.

SSF Home Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSF Home Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, SSF Home disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Steel Hawk and SSF Home

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

The idea behind Steel Hawk Berhad and SSF Home Group 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.