Correlation Between SLR Investment and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both SLR Investment and CosmoSteel Holdings 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 SLR Investment and CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on SLR Investment and CosmoSteel Holdings 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 SLR Investment with a short position of CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and CosmoSteel Holdings.
Diversification Opportunities for SLR Investment and CosmoSteel Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SLR and CosmoSteel is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings and SLR Investment 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 SLR Investment Corp are associated (or correlated) with CosmoSteel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CosmoSteel Holdings has no effect on the direction of SLR Investment i.e., SLR Investment and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between SLR Investment and CosmoSteel Holdings
Assuming the 90 days horizon SLR Investment Corp is expected to generate 0.92 times more return on investment than CosmoSteel Holdings. However, SLR Investment Corp is 1.08 times less risky than CosmoSteel Holdings. It trades about 0.25 of its potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about -0.02 per unit of risk. If you would invest 1,412 in SLR Investment Corp on August 31, 2024 and sell it today you would earn a total of 158.00 from holding SLR Investment Corp or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| SLR Investment Corp |
| CosmoSteel Holdings |
SLR Investment and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and CosmoSteel Holdings
The main advantage of trading using opposite SLR Investment and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, CosmoSteel Holdings 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 Holdings will offset losses from the drop in CosmoSteel Holdings' long position.| SLR Investment vs. Astral Foods Limited | SLR Investment vs. Collins Foods Limited | SLR Investment vs. United Natural Foods | SLR Investment vs. GRIFFIN MINING LTD |
| CosmoSteel Holdings vs. WATSCO INC B | CosmoSteel Holdings vs. Indutrade AB | CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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