Correlation Between COSMOSTEEL HLDGS and Fresenius
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and Fresenius 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 Fresenius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and Fresenius SE Co, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and Fresenius 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 Fresenius. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and Fresenius.
Diversification Opportunities for COSMOSTEEL HLDGS and Fresenius
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COSMOSTEEL and Fresenius is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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 Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Fresenius go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and Fresenius
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 1.47 times more return on investment than Fresenius. However, COSMOSTEEL HLDGS is 1.47 times more volatile than Fresenius SE Co. It trades about -0.01 of its potential returns per unit of risk. Fresenius SE Co is currently generating about -0.12 per unit of risk. If you would invest 6.00 in COSMOSTEEL HLDGS on August 28, 2024 and sell it today you would lose (0.05) from holding COSMOSTEEL HLDGS or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. Fresenius SE Co
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| Fresenius SE |
COSMOSTEEL HLDGS and Fresenius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and Fresenius
The main advantage of trading using opposite COSMOSTEEL HLDGS and Fresenius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS position performs unexpectedly, Fresenius 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 Fresenius will offset losses from the drop in Fresenius' long position.| COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Microsoft |
| Fresenius vs. LEGACY IRON ORE | Fresenius vs. SIMS METAL MGT | Fresenius vs. Jacquet Metal Service | Fresenius vs. COSMOSTEEL HLDGS |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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