Correlation Between CosmoSteel Holdings and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) 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 CEOTRONICS, you can compare the effects of market volatilities on CosmoSteel Holdings and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and CEOTRONICS (CEKSG).
Diversification Opportunities for CosmoSteel Holdings and CEOTRONICS (CEKSG)
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CosmoSteel and CEOTRONICS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and CEOTRONICS (CEKSG)
Assuming the 90 days horizon CosmoSteel Holdings is expected to generate 6.53 times less return on investment than CEOTRONICS (CEKSG). But when comparing it to its historical volatility, CosmoSteel Holdings Limited is 1.3 times less risky than CEOTRONICS (CEKSG). It trades about 0.06 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 515.00 in CEOTRONICS on September 2, 2024 and sell it today you would earn a total of 105.00 from holding CEOTRONICS or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. CEOTRONICS
Performance |
| Timeline |
| CosmoSteel Holdings |
| CEOTRONICS (CEKSG) |
CosmoSteel Holdings and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and CEOTRONICS (CEKSG)
The main advantage of trading using opposite CosmoSteel Holdings and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.| CosmoSteel Holdings vs. WATSCO INC B | CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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