Correlation Between Cosco Capital and STI Education
Can any of the company-specific risk be diversified away by investing in both Cosco Capital and STI Education 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 Cosco Capital and STI Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosco Capital and STI Education Systems, you can compare the effects of market volatilities on Cosco Capital and STI Education 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 Cosco Capital with a short position of STI Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosco Capital and STI Education.
Diversification Opportunities for Cosco Capital and STI Education
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cosco and STI is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cosco Capital and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems and Cosco Capital 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 Cosco Capital are associated (or correlated) with STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Cosco Capital i.e., Cosco Capital and STI Education go up and down completely randomly.
Pair Corralation between Cosco Capital and STI Education
Assuming the 90 days trading horizon Cosco Capital is expected to generate 1.89 times less return on investment than STI Education. But when comparing it to its historical volatility, Cosco Capital is 2.21 times less risky than STI Education. It trades about 0.11 of its potential returns per unit of risk. STI Education Systems is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 93.00 in STI Education Systems on September 3, 2024 and sell it today you would earn a total of 28.00 from holding STI Education Systems or generate 30.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosco Capital vs. STI Education Systems
Performance |
| Timeline |
| Cosco Capital |
| STI Education Systems |
Cosco Capital and STI Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosco Capital and STI Education
The main advantage of trading using opposite Cosco Capital and STI Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosco Capital position performs unexpectedly, STI Education 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 STI Education will offset losses from the drop in STI Education's long position.| Cosco Capital vs. Semirara Mining Corp | Cosco Capital vs. Figaro Coffee Group | Cosco Capital vs. Premiere Entertainment | Cosco Capital vs. Manila Mining Corp |
| STI Education vs. Apex Mining Co | STI Education vs. Philex Mining Corp | STI Education vs. Sun Life Financial | STI Education vs. Converge Information Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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