Correlation Between Steel Hawk and Teo Seng
Can any of the company-specific risk be diversified away by investing in both Steel Hawk and Teo Seng 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 Teo Seng 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 Teo Seng Capital, you can compare the effects of market volatilities on Steel Hawk and Teo Seng 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 Teo Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Hawk and Teo Seng.
Diversification Opportunities for Steel Hawk and Teo Seng
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steel and Teo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Steel Hawk Berhad and Teo Seng Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teo Seng Capital 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 Teo Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teo Seng Capital has no effect on the direction of Steel Hawk i.e., Steel Hawk and Teo Seng go up and down completely randomly.
Pair Corralation between Steel Hawk and Teo Seng
Assuming the 90 days trading horizon Steel Hawk Berhad is expected to generate 1.11 times more return on investment than Teo Seng. However, Steel Hawk is 1.11 times more volatile than Teo Seng Capital. It trades about 0.19 of its potential returns per unit of risk. Teo Seng Capital is currently generating about -0.25 per unit of risk. If you would invest 46.00 in Steel Hawk Berhad on October 8, 2024 and sell it today you would earn a total of 3.00 from holding Steel Hawk Berhad or generate 6.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Steel Hawk Berhad vs. Teo Seng Capital
Performance |
Timeline |
Steel Hawk Berhad |
Teo Seng Capital |
Steel Hawk and Teo Seng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Hawk and Teo Seng
The main advantage of trading using opposite Steel Hawk and Teo Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Hawk position performs unexpectedly, Teo Seng 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 Teo Seng will offset losses from the drop in Teo Seng's long position.Steel Hawk vs. Resintech Bhd | Steel Hawk vs. Malaysia Steel Works | Steel Hawk vs. Uchi Technologies Bhd | Steel Hawk vs. Tex Cycle Technology |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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