Correlation Between Cosmo Metals and Capricorn Metals
Can any of the company-specific risk be diversified away by investing in both Cosmo Metals and Capricorn Metals 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 Cosmo Metals and Capricorn Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmo Metals and Capricorn Metals, you can compare the effects of market volatilities on Cosmo Metals and Capricorn Metals 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 Cosmo Metals with a short position of Capricorn Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmo Metals and Capricorn Metals.
Diversification Opportunities for Cosmo Metals and Capricorn Metals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cosmo and Capricorn is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cosmo Metals and Capricorn Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricorn Metals and Cosmo Metals 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 Cosmo Metals are associated (or correlated) with Capricorn Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricorn Metals has no effect on the direction of Cosmo Metals i.e., Cosmo Metals and Capricorn Metals go up and down completely randomly.
Pair Corralation between Cosmo Metals and Capricorn Metals
Assuming the 90 days trading horizon Cosmo Metals is expected to under-perform the Capricorn Metals. In addition to that, Cosmo Metals is 1.66 times more volatile than Capricorn Metals. It trades about -0.33 of its total potential returns per unit of risk. Capricorn Metals is currently generating about 0.38 per unit of volatility. If you would invest 647.00 in Capricorn Metals on October 22, 2024 and sell it today you would earn a total of 69.00 from holding Capricorn Metals or generate 10.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 94.74% |
Values | Daily Returns |
Cosmo Metals vs. Capricorn Metals
Performance |
Timeline |
Cosmo Metals |
Capricorn Metals |
Cosmo Metals and Capricorn Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cosmo Metals and Capricorn Metals
The main advantage of trading using opposite Cosmo Metals and Capricorn Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmo Metals position performs unexpectedly, Capricorn Metals 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 Capricorn Metals will offset losses from the drop in Capricorn Metals' long position.Cosmo Metals vs. Farm Pride Foods | Cosmo Metals vs. Pinnacle Investment Management | Cosmo Metals vs. Retail Food Group | Cosmo Metals vs. Dexus Convenience Retail |
Capricorn Metals vs. Queste Communications | Capricorn Metals vs. Dexus Convenience Retail | Capricorn Metals vs. Charter Hall Retail | Capricorn Metals vs. Cosmo Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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