Correlation Between Leader Steel and Asian Pac

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

By analyzing existing cross correlation between Leader Steel Holdings and Asian Pac Holdings, you can compare the effects of market volatilities on Leader Steel and Asian Pac 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 Leader Steel with a short position of Asian Pac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and Asian Pac.

Diversification Opportunities for Leader Steel and Asian Pac

0.0

Correlation Coefficient

Leader Steel  Asian Pac

Pay attention - limited upside

The 3 months correlation between Leader and Asian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and Asian Pac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pac Holdings and Leader 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 Leader Steel Holdings are associated (or correlated) with Asian Pac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pac Holdings has no effect on the direction of Leader Steel i.e., Leader Steel and Asian Pac go up and down completely randomly.

Pair Corralation between Leader Steel and Asian Pac

If you would invest  42.00  in Leader Steel Holdings on October 16, 2024 and sell it today you would earn a total of  2.00  from holding Leader Steel Holdings or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Leader Steel Holdings  vs.  Asian Pac Holdings

Leader Steel Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Asian Pac Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asian Pac Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Asian Pac is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Leader Steel and Asian Pac

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

The idea behind Leader Steel Holdings and Asian Pac 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.