Correlation Between GRUPO CARSO-A1 and COSMOSTEEL HLDGS

Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 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 GRUPO CARSO-A1 and COSMOSTEEL HLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRUPO CARSO A1 and COSMOSTEEL HLDGS, you can compare the effects of market volatilities on GRUPO CARSO-A1 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 GRUPO CARSO-A1 with a short position of COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and COSMOSTEEL HLDGS.

Diversification Opportunities for GRUPO CARSO-A1 and COSMOSTEEL HLDGS

0.32

Correlation Coefficient

GRUPO CARSO-A1  COSMOSTEEL HLDGS

Weak diversification

The 3 months correlation between GRUPO and COSMOSTEEL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS and GRUPO CARSO-A1 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 GRUPO CARSO A1 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 GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and COSMOSTEEL HLDGS go up and down completely randomly.

Pair Corralation between GRUPO CARSO-A1 and COSMOSTEEL HLDGS

Assuming the 90 days trading horizon GRUPO CARSO-A1 is expected to generate 3.34 times less return on investment than COSMOSTEEL HLDGS. But when comparing it to its historical volatility, GRUPO CARSO A1 is 1.46 times less risky than COSMOSTEEL HLDGS. It trades about 0.04 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6.75  in COSMOSTEEL HLDGS on December 23, 2024 and sell it today you would earn a total of  1.10  from holding COSMOSTEEL HLDGS or generate 16.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GRUPO CARSO A1  vs.  COSMOSTEEL HLDGS

GRUPO CARSO A1

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO CARSO A1 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GRUPO CARSO-A1 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

COSMOSTEEL HLDGS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COSMOSTEEL HLDGS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRUPO CARSO-A1 and COSMOSTEEL HLDGS

The main advantage of trading using opposite GRUPO CARSO-A1 and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 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 GRUPO CARSO A1 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.