Correlation Between VITEC SOFTWARE and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both VITEC SOFTWARE and COSMOSTEEL HLDGS 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 VITEC SOFTWARE and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VITEC SOFTWARE GROUP and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on VITEC SOFTWARE and COSMOSTEEL HLDGS 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 VITEC SOFTWARE with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and COSMOSTEEL HLDGS.
Diversification Opportunities for VITEC SOFTWARE and COSMOSTEEL HLDGS
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VITEC and COSMOSTEEL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and VITEC SOFTWARE 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 VITEC SOFTWARE GROUP are associated (or correlated) with COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of VITEC SOFTWARE i.e., VITEC SOFTWARE and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between VITEC SOFTWARE and COSMOSTEEL HLDGS
Assuming the 90 days horizon VITEC SOFTWARE is expected to generate 2.74 times less return on investment than COSMOSTEEL HLDGS. But when comparing it to its historical volatility, VITEC SOFTWARE GROUP is 1.36 times less risky than COSMOSTEEL HLDGS. It trades about 0.01 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6.47 in COSMOSTEEL HLDGS on August 31, 2024 and sell it today you would lose (0.22) from holding COSMOSTEEL HLDGS or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
VITEC SOFTWARE GROUP vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| VITEC SOFTWARE GROUP |
| COSMOSTEEL HLDGS |
VITEC SOFTWARE and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITEC SOFTWARE and COSMOSTEEL HLDGS
The main advantage of trading using opposite VITEC SOFTWARE and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITEC SOFTWARE position performs unexpectedly, COSMOSTEEL HLDGS 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 HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.| VITEC SOFTWARE vs. Spirent Communications plc | VITEC SOFTWARE vs. Charter Communications | VITEC SOFTWARE vs. Chuangs China Investments | VITEC SOFTWARE vs. SBA Communications Corp |
| COSMOSTEEL HLDGS vs. Broadcom | COSMOSTEEL HLDGS vs. TITANIUM TRANSPORTGROUP | COSMOSTEEL HLDGS vs. Fukuyama Transporting Co | COSMOSTEEL HLDGS vs. Sims Metal Management |
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 CEOs Directory module to screen CEOs from public companies around the world.
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