Correlation Between CosmoSteel Holdings and Major Drilling
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and Major Drilling 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 CosmoSteel Holdings and Major Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CosmoSteel Holdings Limited and Major Drilling Group, you can compare the effects of market volatilities on CosmoSteel Holdings and Major Drilling 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 CosmoSteel Holdings with a short position of Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and Major Drilling.
Diversification Opportunities for CosmoSteel Holdings and Major Drilling
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between CosmoSteel and Major is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group and CosmoSteel Holdings 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 CosmoSteel Holdings Limited are associated (or correlated) with Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and Major Drilling go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and Major Drilling
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 0.78 times more return on investment than Major Drilling. However, CosmoSteel Holdings Limited is 1.28 times less risky than Major Drilling. It trades about -0.01 of its potential returns per unit of risk. Major Drilling Group is currently generating about -0.02 per unit of risk. If you would invest 6.40 in CosmoSteel Holdings Limited on August 28, 2024 and sell it today you would lose (0.35) from holding CosmoSteel Holdings Limited or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. Major Drilling Group
Performance |
| Timeline |
| CosmoSteel Holdings |
| Major Drilling Group |
CosmoSteel Holdings and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and Major Drilling
The main advantage of trading using opposite CosmoSteel Holdings and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech | CosmoSteel Holdings vs. SIVERS SEMICONDUCTORS AB |
| Major Drilling vs. Superior Plus Corp | Major Drilling vs. NMI Holdings | Major Drilling vs. Origin Agritech | Major Drilling 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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