Correlation Between Caltagirone SpA and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA and COSMOSTEEL HLDGS 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 Caltagirone SpA and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on Caltagirone SpA and COSMOSTEEL HLDGS 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 Caltagirone SpA with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and COSMOSTEEL HLDGS.
Diversification Opportunities for Caltagirone SpA and COSMOSTEEL HLDGS
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caltagirone and COSMOSTEEL is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and Caltagirone SpA 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 Caltagirone SpA are associated (or correlated) with COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of Caltagirone SpA i.e., Caltagirone SpA and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between Caltagirone SpA and COSMOSTEEL HLDGS
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 1.19 times less return on investment than COSMOSTEEL HLDGS. In addition to that, Caltagirone SpA is 2.21 times more volatile than COSMOSTEEL HLDGS. It trades about 0.07 of its total potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.19 per unit of volatility. If you would invest 5.80 in COSMOSTEEL HLDGS on September 3, 2024 and sell it today you would earn a total of 0.45 from holding COSMOSTEEL HLDGS or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| Caltagirone SpA |
| COSMOSTEEL HLDGS |
Caltagirone SpA and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and COSMOSTEEL HLDGS
The main advantage of trading using opposite Caltagirone SpA and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| COSMOSTEEL HLDGS vs. EHEALTH | COSMOSTEEL HLDGS vs. Taylor Morrison Home | COSMOSTEEL HLDGS vs. Neinor Homes SA | COSMOSTEEL HLDGS vs. FEMALE HEALTH |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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