Correlation Between Minerals Technologies and YTLBerhad

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

By analyzing existing cross correlation between Minerals Technologies and YTL Berhad, you can compare the effects of market volatilities on Minerals Technologies and YTLBerhad 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 Minerals Technologies with a short position of YTLBerhad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and YTLBerhad.

Diversification Opportunities for Minerals Technologies and YTLBerhad

-0.71

Correlation Coefficient

Minerals Technologies  YTLBerhad

Pay attention - limited upside

The 3 months correlation between Minerals and YTLBerhad is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and YTL Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Berhad and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with YTLBerhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Berhad has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and YTLBerhad go up and down completely randomly.

Pair Corralation between Minerals Technologies and YTLBerhad

Considering the 90-day investment horizon Minerals Technologies is expected to generate 1.27 times less return on investment than YTLBerhad. But when comparing it to its historical volatility, Minerals Technologies is 1.06 times less risky than YTLBerhad. It trades about 0.18 of its potential returns per unit of risk. YTL Berhad is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  41.00  in YTL Berhad on September 4, 2024 and sell it today you would earn a total of  5.00  from holding YTL Berhad or generate 12.2% return on investment over 90 days.

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

Minerals Technologies  vs.  YTL Berhad

Minerals Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minerals Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

YTL Berhad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YTL Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Minerals Technologies and YTLBerhad

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

The idea behind Minerals Technologies and YTL Berhad 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..