Correlation Between MCS Steel and Asia Plus

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

By analyzing existing cross correlation between MCS Steel Public and Asia Plus Group, you can compare the effects of market volatilities on MCS Steel and Asia Plus 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 MCS Steel with a short position of Asia Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Asia Plus.

Diversification Opportunities for MCS Steel and Asia Plus

0.0

Correlation Coefficient

MCS Steel  Asia Plus

Pay attention - limited upside

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

Pair Corralation between MCS Steel and Asia Plus

If you would invest  670.00  in MCS Steel Public on December 28, 2024 and sell it today you would earn a total of  65.00  from holding MCS Steel Public or generate 9.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MCS Steel Public  vs.  Asia Plus Group

MCS Steel Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MCS Steel Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, MCS Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Asia Plus Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Plus Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Asia Plus 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 MCS Steel and Asia Plus

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

The idea behind MCS Steel Public and Asia Plus Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.