Correlation Between Major Drilling and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both Major Drilling 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 Major Drilling and CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Drilling Group and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on Major Drilling 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 Major Drilling with a short position of CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and CosmoSteel Holdings.
Diversification Opportunities for Major Drilling and CosmoSteel Holdings
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Major and CosmoSteel is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings and Major Drilling 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 Major Drilling Group 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 Major Drilling i.e., Major Drilling and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between Major Drilling and CosmoSteel Holdings
Assuming the 90 days horizon Major Drilling Group is expected to under-perform the CosmoSteel Holdings. In addition to that, Major Drilling is 1.28 times more volatile than CosmoSteel Holdings Limited. It trades about -0.02 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 6.40 in CosmoSteel Holdings Limited on August 28, 2024 and sell it today you would lose (0.35) from holding CosmoSteel Holdings Limited or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Major Drilling Group vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| Major Drilling Group |
| CosmoSteel Holdings |
Major Drilling and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and CosmoSteel Holdings
The main advantage of trading using opposite Major Drilling and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling 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.| Major Drilling vs. Superior Plus Corp | Major Drilling vs. NMI Holdings | Major Drilling vs. Origin Agritech | Major Drilling vs. SIVERS SEMICONDUCTORS AB |
| CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech | CosmoSteel Holdings vs. SIVERS SEMICONDUCTORS AB |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |