Correlation Between COSMOSTEEL HLDGS and United Insurance
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and United Insurance 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 HLDGS and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and United Insurance Holdings, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and United Insurance 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 HLDGS with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and United Insurance.
Diversification Opportunities for COSMOSTEEL HLDGS and United Insurance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COSMOSTEEL and United is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and United Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance Holdings and COSMOSTEEL HLDGS 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 HLDGS are associated (or correlated) with United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance Holdings has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and United Insurance go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and United Insurance
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 0.65 times more return on investment than United Insurance. However, COSMOSTEEL HLDGS is 1.54 times less risky than United Insurance. It trades about 0.04 of its potential returns per unit of risk. United Insurance Holdings is currently generating about -0.06 per unit of risk. If you would invest 6.75 in COSMOSTEEL HLDGS on October 23, 2024 and sell it today you would earn a total of 0.05 from holding COSMOSTEEL HLDGS or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. United Insurance Holdings
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| United Insurance Holdings |
COSMOSTEEL HLDGS and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and United Insurance
The main advantage of trading using opposite COSMOSTEEL HLDGS and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS position performs unexpectedly, United Insurance 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 United Insurance will offset losses from the drop in United Insurance's long position.| COSMOSTEEL HLDGS vs. Golden Entertainment | COSMOSTEEL HLDGS vs. Cairo Communication SpA | COSMOSTEEL HLDGS vs. Zoom Video Communications | COSMOSTEEL HLDGS vs. TOWNSQUARE MEDIA INC |
| United Insurance vs. Flutter Entertainment PLC | United Insurance vs. Tencent Music Entertainment | United Insurance vs. Grupo Media Capital | United Insurance vs. ON SEMICONDUCTOR |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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