Correlation Between New Residential and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both New Residential 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 New Residential and CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on New Residential 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 New Residential with a short position of CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and CosmoSteel Holdings.
Diversification Opportunities for New Residential and CosmoSteel Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and CosmoSteel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings and New Residential 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 New Residential Investment 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 New Residential i.e., New Residential and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between New Residential and CosmoSteel Holdings
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.49 times more return on investment than CosmoSteel Holdings. However, New Residential Investment is 2.02 times less risky than CosmoSteel Holdings. It trades about 0.07 of its potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about 0.0 per unit of risk. If you would invest 674.00 in New Residential Investment on September 2, 2024 and sell it today you would earn a total of 384.00 from holding New Residential Investment or generate 56.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| New Residential Inve |
| CosmoSteel Holdings |
New Residential and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and CosmoSteel Holdings
The main advantage of trading using opposite New Residential and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential 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.| New Residential vs. The Bank of | New Residential vs. Allianz SE | New Residential vs. Sixt SE | New Residential vs. China Construction Bank |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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