Correlation Between Mycron Steel and Kobay Tech
Can any of the company-specific risk be diversified away by investing in both Mycron Steel and Kobay Tech 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 Kobay Tech 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 Kobay Tech Bhd, you can compare the effects of market volatilities on Mycron Steel and Kobay Tech 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 Kobay Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and Kobay Tech.
Diversification Opportunities for Mycron Steel and Kobay Tech
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mycron and Kobay is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel Bhd and Kobay Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kobay Tech 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 Kobay Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kobay Tech Bhd has no effect on the direction of Mycron Steel i.e., Mycron Steel and Kobay Tech go up and down completely randomly.
Pair Corralation between Mycron Steel and Kobay Tech
Assuming the 90 days trading horizon Mycron Steel is expected to generate 5.14 times less return on investment than Kobay Tech. In addition to that, Mycron Steel is 1.21 times more volatile than Kobay Tech Bhd. It trades about 0.01 of its total potential returns per unit of risk. Kobay Tech Bhd is currently generating about 0.08 per unit of volatility. If you would invest 152.00 in Kobay Tech Bhd on October 11, 2024 and sell it today you would earn a total of 5.00 from holding Kobay Tech Bhd or generate 3.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mycron Steel Bhd vs. Kobay Tech Bhd
Performance |
Timeline |
Mycron Steel Bhd |
Kobay Tech Bhd |
Mycron Steel and Kobay Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mycron Steel and Kobay Tech
The main advantage of trading using opposite Mycron Steel and Kobay Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel position performs unexpectedly, Kobay Tech 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 Kobay Tech will offset losses from the drop in Kobay Tech's long position.Mycron Steel vs. Sunway Construction Group | Mycron Steel vs. SSF Home Group | Mycron Steel vs. Farm Price Holdings | Mycron Steel vs. Rubberex M |
Kobay Tech vs. Choo Bee Metal | Kobay Tech vs. Senheng New Retail | Kobay Tech vs. MClean Technologies Bhd | Kobay Tech vs. MI Technovation Bhd |
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.
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