Correlation Between Mycron Steel and Scientex Bhd

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Can any of the company-specific risk be diversified away by investing in both Mycron Steel and Scientex Bhd 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 Mycron Steel and Scientex Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mycron Steel Bhd and Scientex Bhd, you can compare the effects of market volatilities on Mycron Steel and Scientex Bhd 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 Mycron Steel with a short position of Scientex Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and Scientex Bhd.

Diversification Opportunities for Mycron Steel and Scientex Bhd

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Mycron and Scientex is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and Scientex Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientex Bhd and Mycron Steel 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 Mycron Steel Bhd are associated (or correlated) with Scientex Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientex Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and Scientex Bhd go up and down completely randomly.

Pair Corralation between Mycron Steel and Scientex Bhd

Assuming the 90 days trading horizon Mycron Steel is expected to generate 4.13 times less return on investment than Scientex Bhd. In addition to that, Mycron Steel is 2.42 times more volatile than Scientex Bhd. It trades about 0.01 of its total potential returns per unit of risk. Scientex Bhd is currently generating about 0.06 per unit of volatility. If you would invest  317.00  in Scientex Bhd on September 28, 2024 and sell it today you would earn a total of  140.00  from holding Scientex Bhd or generate 44.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mycron Steel Bhd  vs.  Scientex Bhd

 Performance 
       Timeline  
Mycron Steel Bhd 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Scientex Bhd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Scientex Bhd may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mycron Steel and Scientex Bhd Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mycron Steel and Scientex Bhd

The main advantage of trading using opposite Mycron Steel and Scientex Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, Scientex Bhd 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 Scientex Bhd will offset losses from the drop in Scientex Bhd's long position.
The idea behind Mycron Steel Bhd and Scientex Bhd 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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