Correlation Between CosmoSteel Holdings and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and CSSC Offshore 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 CSSC Offshore 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 CSSC Offshore Marine, you can compare the effects of market volatilities on CosmoSteel Holdings and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and CSSC Offshore.
Diversification Opportunities for CosmoSteel Holdings and CSSC Offshore
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CosmoSteel and CSSC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and CSSC Offshore go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and CSSC Offshore
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 0.69 times more return on investment than CSSC Offshore. However, CosmoSteel Holdings Limited is 1.44 times less risky than CSSC Offshore. It trades about 0.18 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.13 per unit of risk. If you would invest 5.80 in CosmoSteel Holdings Limited on September 3, 2024 and sell it today you would earn a total of 0.45 from holding CosmoSteel Holdings Limited or generate 7.76% 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. CSSC Offshore Marine
Performance |
| Timeline |
| CosmoSteel Holdings |
| CSSC Offshore Marine |
CosmoSteel Holdings and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and CSSC Offshore
The main advantage of trading using opposite CosmoSteel Holdings and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| CosmoSteel Holdings vs. KIMBALL ELECTRONICS | CosmoSteel Holdings vs. Benchmark Electronics | CosmoSteel Holdings vs. RYU Apparel | CosmoSteel Holdings vs. ELECTRONIC ARTS |
| CSSC Offshore vs. SBA Communications Corp | CSSC Offshore vs. FIREWEED METALS P | CSSC Offshore vs. Jacquet Metal Service | CSSC Offshore vs. Shenandoah Telecommunications |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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