Correlation Between Malaysia Steel and Coraza Integrated

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

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

Diversification Opportunities for Malaysia Steel and Coraza Integrated

0.13

Correlation Coefficient

Malaysia Steel  Coraza Integrated

Average diversification

The 3 months correlation between Malaysia and Coraza is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Malaysia Steel Works and Coraza Integrated Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coraza Integrated and Malaysia 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 Malaysia Steel Works are associated (or correlated) with Coraza Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coraza Integrated has no effect on the direction of Malaysia Steel i.e., Malaysia Steel and Coraza Integrated go up and down completely randomly.

Pair Corralation between Malaysia Steel and Coraza Integrated

Assuming the 90 days trading horizon Malaysia Steel Works is expected to under-perform the Coraza Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Malaysia Steel Works is 1.67 times less risky than Coraza Integrated. The stock trades about -0.09 of its potential returns per unit of risk. The Coraza Integrated Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Coraza Integrated Technology on December 1, 2024 and sell it today you would earn a total of  5.00  from holding Coraza Integrated Technology or generate 10.2% return on investment over 90 days.

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

Malaysia Steel Works  vs.  Coraza Integrated Technology

Malaysia Steel Works

Risk-Adjusted Performance

Very Weak

Over the last 90 days Malaysia Steel Works has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Coraza Integrated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coraza Integrated Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Coraza Integrated disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Malaysia Steel and Coraza Integrated

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

The idea behind Malaysia Steel Works and Coraza Integrated Technology 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.