Correlation Between COSMOSTEEL HLDGS and Hon Hai
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and Hon Hai 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 Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and Hon Hai Precision, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and Hon Hai.
Diversification Opportunities for COSMOSTEEL HLDGS and Hon Hai
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COSMOSTEEL and Hon is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Hon Hai go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and Hon Hai
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 0.35 times more return on investment than Hon Hai. However, COSMOSTEEL HLDGS is 2.86 times less risky than Hon Hai. It trades about 0.07 of its potential returns per unit of risk. Hon Hai Precision is currently generating about -0.03 per unit of risk. If you would invest 6.75 in COSMOSTEEL HLDGS on October 24, 2024 and sell it today you would earn a total of 0.10 from holding COSMOSTEEL HLDGS or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. Hon Hai Precision
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| Hon Hai Precision |
COSMOSTEEL HLDGS and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and Hon Hai
The main advantage of trading using opposite COSMOSTEEL HLDGS and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| COSMOSTEEL HLDGS vs. FORWARD AIR P | COSMOSTEEL HLDGS vs. Nippon Light Metal | COSMOSTEEL HLDGS vs. Pentair plc | COSMOSTEEL HLDGS vs. Yuexiu Transport Infrastructure |
| Hon Hai vs. Allegheny Technologies Incorporated | Hon Hai vs. CALTAGIRONE EDITORE | Hon Hai vs. COSMOSTEEL HLDGS | Hon Hai vs. NEW MILLENNIUM IRON |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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