Correlation Between CosmoSteel Holdings and SLR Investment
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on CosmoSteel Holdings and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and SLR Investment.
Diversification Opportunities for CosmoSteel Holdings and SLR Investment
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CosmoSteel and SLR is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and SLR Investment go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and SLR Investment
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to under-perform the SLR Investment. In addition to that, CosmoSteel Holdings is 1.08 times more volatile than SLR Investment Corp. It trades about -0.02 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.25 per unit of volatility. If you would invest 1,412 in SLR Investment Corp on August 31, 2024 and sell it today you would earn a total of 158.00 from holding SLR Investment Corp or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. SLR Investment Corp
Performance |
| Timeline |
| CosmoSteel Holdings |
| SLR Investment Corp |
CosmoSteel Holdings and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and SLR Investment
The main advantage of trading using opposite CosmoSteel Holdings and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| CosmoSteel Holdings vs. WATSCO INC B | CosmoSteel Holdings vs. Indutrade AB | CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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