Correlation Between COSMOSTEEL HLDGS and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and WuXi AppTec 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 WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and WuXi AppTec Co, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and WuXi AppTec.
Diversification Opportunities for COSMOSTEEL HLDGS and WuXi AppTec
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COSMOSTEEL and WuXi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and WuXi AppTec go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and WuXi AppTec
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to under-perform the WuXi AppTec. But the stock apears to be less risky and, when comparing its historical volatility, COSMOSTEEL HLDGS is 3.14 times less risky than WuXi AppTec. The stock trades about -0.01 of its potential returns per unit of risk. The WuXi AppTec Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 287.00 in WuXi AppTec Co on August 29, 2024 and sell it today you would earn a total of 263.00 from holding WuXi AppTec Co or generate 91.64% 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. WuXi AppTec Co
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| WuXi AppTec |
COSMOSTEEL HLDGS and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and WuXi AppTec
The main advantage of trading using opposite COSMOSTEEL HLDGS and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Superior Plus Corp | COSMOSTEEL HLDGS vs. SIVERS SEMICONDUCTORS AB |
| WuXi AppTec vs. RYU Apparel | WuXi AppTec vs. PLAY2CHILL SA ZY | WuXi AppTec vs. Columbia Sportswear | WuXi AppTec vs. URBAN OUTFITTERS |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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