Correlation Between ABO-GROUP ENVIRONMENT and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both ABO-GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT and CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABO GROUP ENVIRONMENT and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on ABO-GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT with a short position of CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABO-GROUP ENVIRONMENT and CosmoSteel Holdings.
Diversification Opportunities for ABO-GROUP ENVIRONMENT and CosmoSteel Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABO-GROUP and CosmoSteel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ABO GROUP ENVIRONMENT and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings and ABO-GROUP ENVIRONMENT 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 ABO GROUP ENVIRONMENT 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 ABO-GROUP ENVIRONMENT i.e., ABO-GROUP ENVIRONMENT and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between ABO-GROUP ENVIRONMENT and CosmoSteel Holdings
Assuming the 90 days trading horizon ABO GROUP ENVIRONMENT is expected to generate 0.92 times more return on investment than CosmoSteel Holdings. However, ABO GROUP ENVIRONMENT is 1.09 times less risky than CosmoSteel Holdings. It trades about 0.0 of its potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about -0.01 per unit of risk. If you would invest 521.00 in ABO GROUP ENVIRONMENT on September 1, 2024 and sell it today you would lose (39.00) from holding ABO GROUP ENVIRONMENT or give up 7.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
ABO GROUP ENVIRONMENT vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| ABO GROUP ENVIRONMENT |
| CosmoSteel Holdings |
ABO-GROUP ENVIRONMENT and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABO-GROUP ENVIRONMENT and CosmoSteel Holdings
The main advantage of trading using opposite ABO-GROUP ENVIRONMENT and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABO-GROUP ENVIRONMENT 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.| ABO-GROUP ENVIRONMENT vs. Jacquet Metal Service | ABO-GROUP ENVIRONMENT vs. Tyson Foods | ABO-GROUP ENVIRONMENT vs. Dairy Farm International | ABO-GROUP ENVIRONMENT vs. CN MODERN DAIRY |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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