Correlation Between CosmoSteel Holdings and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on CosmoSteel Holdings and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and Perseus Mining.
Diversification Opportunities for CosmoSteel Holdings and Perseus Mining
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CosmoSteel and Perseus is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and Perseus Mining go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and Perseus Mining
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 1.06 times more return on investment than Perseus Mining. However, CosmoSteel Holdings is 1.06 times more volatile than Perseus Mining Limited. It trades about 0.03 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.12 per unit of risk. If you would invest 6.00 in CosmoSteel Holdings Limited on August 27, 2024 and sell it today you would earn a total of 0.05 from holding CosmoSteel Holdings Limited or generate 0.83% 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. Perseus Mining Limited
Performance |
| Timeline |
| CosmoSteel Holdings |
| Perseus Mining |
CosmoSteel Holdings and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and Perseus Mining
The main advantage of trading using opposite CosmoSteel Holdings and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech | CosmoSteel Holdings vs. SIVERS SEMICONDUCTORS AB |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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