Correlation Between CosmoSteel Holdings and NISSIN FOODS
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and NISSIN FOODS 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 NISSIN FOODS 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 NISSIN FOODS HLDGS, you can compare the effects of market volatilities on CosmoSteel Holdings and NISSIN FOODS 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 NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and NISSIN FOODS.
Diversification Opportunities for CosmoSteel Holdings and NISSIN FOODS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CosmoSteel and NISSIN is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS 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 NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and NISSIN FOODS go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and NISSIN FOODS
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 1.37 times more return on investment than NISSIN FOODS. However, CosmoSteel Holdings is 1.37 times more volatile than NISSIN FOODS HLDGS. It trades about 0.32 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about -0.51 per unit of risk. If you would invest 7.20 in CosmoSteel Holdings Limited on November 27, 2024 and sell it today you would earn a total of 1.05 from holding CosmoSteel Holdings Limited or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. NISSIN FOODS HLDGS
Performance |
| Timeline |
| CosmoSteel Holdings |
| NISSIN FOODS HLDGS |
CosmoSteel Holdings and NISSIN FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and NISSIN FOODS
The main advantage of trading using opposite CosmoSteel Holdings and NISSIN FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, NISSIN FOODS 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 NISSIN FOODS will offset losses from the drop in NISSIN FOODS's long position.| CosmoSteel Holdings vs. Cairo Communication SpA | CosmoSteel Holdings vs. Gaming and Leisure | CosmoSteel Holdings vs. PLAYWAY SA ZY 10 | CosmoSteel Holdings vs. Iridium Communications |
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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 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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