Correlation Between Malaysia Steel and Pantech Group

Can any of the company-specific risk be diversified away by investing in both Malaysia Steel and Pantech Group 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 Pantech Group 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 Pantech Group Holdings, you can compare the effects of market volatilities on Malaysia Steel and Pantech Group 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 Pantech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaysia Steel and Pantech Group.

Diversification Opportunities for Malaysia Steel and Pantech Group

0.77

Correlation Coefficient

Malaysia Steel  Pantech Group

Poor diversification

The 3 months correlation between Malaysia and Pantech is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Malaysia Steel Works and Pantech Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pantech Group Holdings 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 Pantech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pantech Group Holdings has no effect on the direction of Malaysia Steel i.e., Malaysia Steel and Pantech Group go up and down completely randomly.

Pair Corralation between Malaysia Steel and Pantech Group

Assuming the 90 days trading horizon Malaysia Steel Works is expected to under-perform the Pantech Group. In addition to that, Malaysia Steel is 1.9 times more volatile than Pantech Group Holdings. It trades about -0.17 of its total potential returns per unit of risk. Pantech Group Holdings is currently generating about -0.11 per unit of volatility. If you would invest  90.00  in Pantech Group Holdings on November 29, 2024 and sell it today you would lose (2.00) from holding Pantech Group Holdings or give up 2.22% of portfolio value over 90 days.

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

Malaysia Steel Works  vs.  Pantech Group Holdings

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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pantech Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pantech Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Malaysia Steel and Pantech Group

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

The idea behind Malaysia Steel Works and Pantech Group Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.