Correlation Between COFCO Joycome and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and CosmoSteel Holdings 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 COFCO Joycome and CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on COFCO Joycome and CosmoSteel Holdings 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 COFCO Joycome with a short position of CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and CosmoSteel Holdings.
Diversification Opportunities for COFCO Joycome and CosmoSteel Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COFCO and CosmoSteel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with CosmoSteel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CosmoSteel Holdings has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between COFCO Joycome and CosmoSteel Holdings
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the CosmoSteel Holdings. In addition to that, COFCO Joycome is 1.65 times more volatile than CosmoSteel Holdings Limited. It trades about -0.01 of its total potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about -0.01 per unit of volatility. If you would invest 6.89 in CosmoSteel Holdings Limited on September 1, 2024 and sell it today you would lose (0.64) from holding CosmoSteel Holdings Limited or give up 9.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| COFCO Joycome Foods |
| CosmoSteel Holdings |
COFCO Joycome and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and CosmoSteel Holdings
The main advantage of trading using opposite COFCO Joycome and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, CosmoSteel Holdings 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 CosmoSteel Holdings will offset losses from the drop in CosmoSteel Holdings' long position.| COFCO Joycome vs. Danone SA | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. NMI Holdings | COFCO Joycome vs. Origin Agritech |
| CosmoSteel Holdings vs. WATSCO INC B | CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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