Correlation Between CosmoSteel Holdings and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on CosmoSteel Holdings and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and DATANG INTL.
Diversification Opportunities for CosmoSteel Holdings and DATANG INTL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CosmoSteel and DATANG is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and DATANG INTL go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and DATANG INTL
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to under-perform the DATANG INTL. But the stock apears to be less risky and, when comparing its historical volatility, CosmoSteel Holdings Limited is 1.68 times less risky than DATANG INTL. The stock trades about -0.01 of its potential returns per unit of risk. The DATANG INTL POW is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in DATANG INTL POW on August 31, 2024 and sell it today you would earn a total of 3.00 from holding DATANG INTL POW or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. DATANG INTL POW
Performance |
| Timeline |
| CosmoSteel Holdings |
| DATANG INTL POW |
CosmoSteel Holdings and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and DATANG INTL
The main advantage of trading using opposite CosmoSteel Holdings and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.| CosmoSteel Holdings vs. WATSCO INC B | CosmoSteel Holdings vs. Indutrade AB | CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings |
| DATANG INTL vs. SIVERS SEMICONDUCTORS AB | DATANG INTL vs. Darden Restaurants | DATANG INTL vs. Reliance Steel Aluminum | DATANG INTL vs. Q2M Managementberatung AG |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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