Correlation Between TRAVEL + and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both TRAVEL + 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 TRAVEL + and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and COSMOSTEEL HLDGS.
Diversification Opportunities for TRAVEL + and COSMOSTEEL HLDGS
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRAVEL and COSMOSTEEL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between TRAVEL + and COSMOSTEEL HLDGS
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to under-perform the COSMOSTEEL HLDGS. But the stock apears to be less risky and, when comparing its historical volatility, TRAVEL LEISURE DL 01 is 1.68 times less risky than COSMOSTEEL HLDGS. The stock trades about -0.1 of its potential returns per unit of risk. The COSMOSTEEL HLDGS is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 6.90 in COSMOSTEEL HLDGS on October 13, 2024 and sell it today you would lose (0.15) from holding COSMOSTEEL HLDGS or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| COSMOSTEEL HLDGS |
TRAVEL + and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and COSMOSTEEL HLDGS
The main advantage of trading using opposite TRAVEL + and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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.The idea behind TRAVEL LEISURE DL 01 and COSMOSTEEL HLDGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| COSMOSTEEL HLDGS vs. PLAYTIKA HOLDING DL 01 | COSMOSTEEL HLDGS vs. CHRYSALIS INVESTMENTS LTD | COSMOSTEEL HLDGS vs. Playa Hotels Resorts | COSMOSTEEL HLDGS vs. TRAVEL LEISURE DL 01 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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