Correlation Between COSMOSTEEL HLDGS and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and ALGOMA STEEL 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 ALGOMA STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and ALGOMA STEEL GROUP, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and ALGOMA STEEL.
Diversification Opportunities for COSMOSTEEL HLDGS and ALGOMA STEEL
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSMOSTEEL and ALGOMA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and ALGOMA STEEL
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 5.63 times less return on investment than ALGOMA STEEL. In addition to that, COSMOSTEEL HLDGS is 1.27 times more volatile than ALGOMA STEEL GROUP. It trades about 0.01 of its total potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about 0.06 per unit of volatility. If you would invest 590.00 in ALGOMA STEEL GROUP on August 28, 2024 and sell it today you would earn a total of 470.00 from holding ALGOMA STEEL GROUP or generate 79.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| ALGOMA STEEL GROUP |
COSMOSTEEL HLDGS and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and ALGOMA STEEL
The main advantage of trading using opposite COSMOSTEEL HLDGS and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Microsoft |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |