Correlation Between CosmoSteel Holdings and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and WuXi AppTec 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 WuXi AppTec 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 WuXi AppTec Co, you can compare the effects of market volatilities on CosmoSteel Holdings and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and WuXi AppTec.
Diversification Opportunities for CosmoSteel Holdings and WuXi AppTec
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CosmoSteel and WuXi is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and WuXi AppTec go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and WuXi AppTec
Assuming the 90 days horizon CosmoSteel Holdings is expected to generate 7.11 times less return on investment than WuXi AppTec. But when comparing it to its historical volatility, CosmoSteel Holdings Limited is 1.84 times less risky than WuXi AppTec. It trades about 0.01 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 544.00 in WuXi AppTec Co on August 26, 2024 and sell it today you would earn a total of 26.00 from holding WuXi AppTec Co or generate 4.78% 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. WuXi AppTec Co
Performance |
| Timeline |
| CosmoSteel Holdings |
| WuXi AppTec |
CosmoSteel Holdings and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and WuXi AppTec
The main advantage of trading using opposite CosmoSteel Holdings and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| CosmoSteel Holdings vs. RETAIL FOOD GROUP | CosmoSteel Holdings vs. QURATE RETAIL INC | CosmoSteel Holdings vs. Daito Trust Construction | CosmoSteel Holdings vs. BJs Wholesale Club |
| WuXi AppTec vs. COSMOSTEEL HLDGS | WuXi AppTec vs. CosmoSteel Holdings Limited | WuXi AppTec vs. Lamar Advertising | WuXi AppTec vs. SALESFORCE INC CDR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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