Correlation Between Séché Environnement and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both Séché Environnement 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 Séché Environnement and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sch Environnement SA and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on Séché Environnement 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 Séché Environnement with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Séché Environnement and COSMOSTEEL HLDGS.
Diversification Opportunities for Séché Environnement and COSMOSTEEL HLDGS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Séché and COSMOSTEEL is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sch Environnement SA and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and Séché Environnement 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 Sch Environnement SA 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 Séché Environnement i.e., Séché Environnement and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between Séché Environnement and COSMOSTEEL HLDGS
Assuming the 90 days horizon Sch Environnement SA is expected to under-perform the COSMOSTEEL HLDGS. But the stock apears to be less risky and, when comparing its historical volatility, Sch Environnement SA is 1.7 times less risky than COSMOSTEEL HLDGS. The stock trades about -0.02 of its potential returns per unit of risk. The COSMOSTEEL HLDGS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6.19 in COSMOSTEEL HLDGS on October 14, 2024 and sell it today you would earn a total of 0.56 from holding COSMOSTEEL HLDGS or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sch Environnement SA vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| Séché Environnement |
| COSMOSTEEL HLDGS |
Séché Environnement and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Séché Environnement and COSMOSTEEL HLDGS
The main advantage of trading using opposite Séché Environnement and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Séché Environnement 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.| Séché Environnement vs. EAGLE MATERIALS | Séché Environnement vs. Applied Materials | Séché Environnement vs. VULCAN MATERIALS | Séché Environnement vs. SILVER BULLET DATA |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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