Correlation Between CosmoSteel Holdings and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on CosmoSteel Holdings and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and BRIT AMER.
Diversification Opportunities for CosmoSteel Holdings and BRIT AMER
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CosmoSteel and BRIT is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and BRIT AMER go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and BRIT AMER
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 5.42 times more return on investment than BRIT AMER. However, CosmoSteel Holdings is 5.42 times more volatile than BRIT AMER TOBACCO. It trades about 0.16 of its potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about -0.02 per unit of risk. If you would invest 5.90 in CosmoSteel Holdings Limited on September 26, 2024 and sell it today you would earn a total of 0.85 from holding CosmoSteel Holdings Limited or generate 14.41% 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. BRIT AMER TOBACCO
Performance |
| Timeline |
| CosmoSteel Holdings |
| BRIT AMER TOBACCO |
CosmoSteel Holdings and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and BRIT AMER
The main advantage of trading using opposite CosmoSteel Holdings and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| CosmoSteel Holdings vs. Coffee Holding Co | CosmoSteel Holdings vs. IMPERIAL TOBACCO | CosmoSteel Holdings vs. BJs Restaurants | CosmoSteel Holdings vs. Lifeway Foods |
| BRIT AMER vs. DISTRICT METALS | BRIT AMER vs. Focus Home Interactive | BRIT AMER vs. Autohome ADR | BRIT AMER vs. Kaiser Aluminum |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |