Correlation Between CosmoSteel Holdings and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and Tianjin Capital 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 Tianjin Capital 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 Tianjin Capital Environmental, you can compare the effects of market volatilities on CosmoSteel Holdings and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and Tianjin Capital.
Diversification Opportunities for CosmoSteel Holdings and Tianjin Capital
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between CosmoSteel and Tianjin is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and Tianjin Capital go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and Tianjin Capital
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to under-perform the Tianjin Capital. In addition to that, CosmoSteel Holdings is 1.27 times more volatile than Tianjin Capital Environmental. It trades about -0.11 of its total potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.07 per unit of volatility. If you would invest 37.00 in Tianjin Capital Environmental on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Tianjin Capital Environmental or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. Tianjin Capital Environmental
Performance |
| Timeline |
| CosmoSteel Holdings |
| Tianjin Capital Envi |
CosmoSteel Holdings and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and Tianjin Capital
The main advantage of trading using opposite CosmoSteel Holdings and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.| CosmoSteel Holdings vs. Indutrade AB | CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech |
| Tianjin Capital vs. GFL ENVIRONM | Tianjin Capital vs. Superior Plus Corp | Tianjin Capital vs. NMI Holdings | Tianjin Capital vs. Origin Agritech |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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