Correlation Between COSMOSTEEL HLDGS and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and AUST AGRICULTURAL 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 AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and AUST AGRICULTURAL, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and AUST AGRICULTURAL.
Diversification Opportunities for COSMOSTEEL HLDGS and AUST AGRICULTURAL
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSMOSTEEL and AUST is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and AUST AGRICULTURAL
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 3.88 times more return on investment than AUST AGRICULTURAL. However, COSMOSTEEL HLDGS is 3.88 times more volatile than AUST AGRICULTURAL. It trades about 0.1 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.0 per unit of risk. If you would invest 5.95 in COSMOSTEEL HLDGS on October 26, 2024 and sell it today you would earn a total of 0.70 from holding COSMOSTEEL HLDGS or generate 11.76% 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. AUST AGRICULTURAL
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| AUST AGRICULTURAL |
COSMOSTEEL HLDGS and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and AUST AGRICULTURAL
The main advantage of trading using opposite COSMOSTEEL HLDGS and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc |
| AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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