Correlation Between CosmoSteel Holdings and PT Bank
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and PT Bank 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 CosmoSteel Holdings and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CosmoSteel Holdings Limited and PT Bank Maybank, you can compare the effects of market volatilities on CosmoSteel Holdings and PT Bank 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 CosmoSteel Holdings with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and PT Bank.
Diversification Opportunities for CosmoSteel Holdings and PT Bank
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CosmoSteel and BOZA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank and CosmoSteel Holdings 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 CosmoSteel Holdings Limited are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Maybank has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and PT Bank go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and PT Bank
Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 1.34 times more return on investment than PT Bank. However, CosmoSteel Holdings is 1.34 times more volatile than PT Bank Maybank. It trades about 0.24 of its potential returns per unit of risk. PT Bank Maybank is currently generating about -0.05 per unit of risk. If you would invest 5.85 in CosmoSteel Holdings Limited on September 18, 2024 and sell it today you would earn a total of 1.25 from holding CosmoSteel Holdings Limited or generate 21.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CosmoSteel Holdings Limited vs. PT Bank Maybank
Performance |
Timeline |
CosmoSteel Holdings |
PT Bank Maybank |
CosmoSteel Holdings and PT Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CosmoSteel Holdings and PT Bank
The main advantage of trading using opposite CosmoSteel Holdings and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.CosmoSteel Holdings vs. CarsalesCom | CosmoSteel Holdings vs. CODERE ONLINE LUX | CosmoSteel Holdings vs. Cogent Communications Holdings | CosmoSteel Holdings vs. Shenandoah Telecommunications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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