Correlation Between AVITA Medical and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both AVITA Medical 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 AVITA Medical and CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on AVITA Medical 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 AVITA Medical with a short position of CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and CosmoSteel Holdings.
Diversification Opportunities for AVITA Medical and CosmoSteel Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between AVITA and CosmoSteel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings and AVITA Medical 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 AVITA Medical 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 AVITA Medical i.e., AVITA Medical and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between AVITA Medical and CosmoSteel Holdings
Assuming the 90 days trading horizon AVITA Medical is expected to generate 5.86 times less return on investment than CosmoSteel Holdings. But when comparing it to its historical volatility, AVITA Medical is 1.24 times less risky than CosmoSteel Holdings. It trades about 0.05 of its potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6.00 in CosmoSteel Holdings Limited on September 14, 2024 and sell it today you would earn a total of 1.30 from holding CosmoSteel Holdings Limited or generate 21.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVITA Medical vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| AVITA Medical |
| CosmoSteel Holdings |
AVITA Medical and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and CosmoSteel Holdings
The main advantage of trading using opposite AVITA Medical and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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.| AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc |
| CosmoSteel Holdings vs. WATSCO INC B | CosmoSteel Holdings vs. Indutrade AB | CosmoSteel Holdings vs. Superior Plus Corp | 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |