Correlation Between CosmoSteel Holdings and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide, you can compare the effects of market volatilities on CosmoSteel Holdings and Kronos Worldwide 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 Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and Kronos Worldwide.
Diversification Opportunities for CosmoSteel Holdings and Kronos Worldwide
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CosmoSteel and Kronos is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide 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 Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and Kronos Worldwide go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and Kronos Worldwide
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to under-perform the Kronos Worldwide. In addition to that, CosmoSteel Holdings is 1.09 times more volatile than Kronos Worldwide. It trades about -0.18 of its total potential returns per unit of risk. Kronos Worldwide is currently generating about -0.09 per unit of volatility. If you would invest 932.00 in Kronos Worldwide on October 20, 2024 and sell it today you would lose (26.00) from holding Kronos Worldwide or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. Kronos Worldwide
Performance |
| Timeline |
| CosmoSteel Holdings |
| Kronos Worldwide |
CosmoSteel Holdings and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and Kronos Worldwide
The main advantage of trading using opposite CosmoSteel Holdings and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.| CosmoSteel Holdings vs. Cass Information Systems | CosmoSteel Holdings vs. PLAYWAY SA ZY 10 | CosmoSteel Holdings vs. COLUMBIA SPORTSWEAR | CosmoSteel Holdings vs. UNIVERSAL DISPLAY |
| Kronos Worldwide vs. Monument Mining Limited | Kronos Worldwide vs. Fast Retailing Co | Kronos Worldwide vs. H2O Retailing | Kronos Worldwide vs. Retail Estates NV |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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