Correlation Between ARISTOCRAT LEISURE and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and COSMOSTEEL HLDGS.
Diversification Opportunities for ARISTOCRAT LEISURE and COSMOSTEEL HLDGS
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARISTOCRAT and COSMOSTEEL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and COSMOSTEEL HLDGS
Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 0.44 times more return on investment than COSMOSTEEL HLDGS. However, ARISTOCRAT LEISURE is 2.28 times less risky than COSMOSTEEL HLDGS. It trades about 0.61 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.06 per unit of risk. If you would invest 3,663 in ARISTOCRAT LEISURE on September 2, 2024 and sell it today you would earn a total of 497.00 from holding ARISTOCRAT LEISURE or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| COSMOSTEEL HLDGS |
ARISTOCRAT LEISURE and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and COSMOSTEEL HLDGS
The main advantage of trading using opposite ARISTOCRAT LEISURE and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE 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.| ARISTOCRAT LEISURE vs. SIVERS SEMICONDUCTORS AB | ARISTOCRAT LEISURE vs. Darden Restaurants | ARISTOCRAT LEISURE vs. Reliance Steel Aluminum | ARISTOCRAT LEISURE vs. Q2M Managementberatung AG |
| COSMOSTEEL HLDGS vs. MOVIE GAMES SA | COSMOSTEEL HLDGS vs. American Airlines Group | COSMOSTEEL HLDGS vs. BW OFFSHORE LTD | COSMOSTEEL HLDGS vs. Aegean Airlines SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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