Correlation Between CosmoSteel Holdings and GUARDANT HEALTH
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and GUARDANT HEALTH 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 GUARDANT HEALTH 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 GUARDANT HEALTH CL, you can compare the effects of market volatilities on CosmoSteel Holdings and GUARDANT HEALTH 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 GUARDANT HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and GUARDANT HEALTH.
Diversification Opportunities for CosmoSteel Holdings and GUARDANT HEALTH
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CosmoSteel and GUARDANT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and GUARDANT HEALTH CL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUARDANT HEALTH CL 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 GUARDANT HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUARDANT HEALTH CL has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and GUARDANT HEALTH go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and GUARDANT HEALTH
Assuming the 90 days horizon CosmoSteel Holdings is expected to generate 3.14 times less return on investment than GUARDANT HEALTH. But when comparing it to its historical volatility, CosmoSteel Holdings Limited is 1.61 times less risky than GUARDANT HEALTH. It trades about 0.02 of its potential returns per unit of risk. GUARDANT HEALTH CL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,395 in GUARDANT HEALTH CL on December 10, 2024 and sell it today you would earn a total of 1,315 from holding GUARDANT HEALTH CL or generate 54.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. GUARDANT HEALTH CL
Performance |
| Timeline |
| CosmoSteel Holdings |
| GUARDANT HEALTH CL |
CosmoSteel Holdings and GUARDANT HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and GUARDANT HEALTH
The main advantage of trading using opposite CosmoSteel Holdings and GUARDANT HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, GUARDANT HEALTH 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 GUARDANT HEALTH will offset losses from the drop in GUARDANT HEALTH's long position.| CosmoSteel Holdings vs. LOANDEPOT INC A | CosmoSteel Holdings vs. FUYO GENERAL LEASE | CosmoSteel Holdings vs. GUILD ESPORTS PLC | CosmoSteel Holdings vs. WILLIS LEASE FIN |
| GUARDANT HEALTH vs. LINMON MEDIA LTD | GUARDANT HEALTH vs. AFRICAN MEDIA ENT | GUARDANT HEALTH vs. Southern Cross Media | GUARDANT HEALTH vs. Nexstar Media Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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