Correlation Between CosmoSteel Holdings and AUSTEVOLL SEAFOOD

Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on CosmoSteel Holdings and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and AUSTEVOLL SEAFOOD.

Diversification Opportunities for CosmoSteel Holdings and AUSTEVOLL SEAFOOD

0.38

Correlation Coefficient

CosmoSteel Holdings  AUSTEVOLL SEAFOOD

Weak diversification

The 3 months correlation between CosmoSteel and AUSTEVOLL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSTEVOLL SEAFOOD has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and AUSTEVOLL SEAFOOD go up and down completely randomly.

Pair Corralation between CosmoSteel Holdings and AUSTEVOLL SEAFOOD

Assuming the 90 days horizon CosmoSteel Holdings Limited is expected to generate 1.45 times more return on investment than AUSTEVOLL SEAFOOD. However, CosmoSteel Holdings is 1.45 times more volatile than AUSTEVOLL SEAFOOD. It trades about 0.15 of its potential returns per unit of risk. AUSTEVOLL SEAFOOD is currently generating about 0.1 per unit of risk. If you would invest  6.50  in CosmoSteel Holdings Limited on December 26, 2024 and sell it today you would earn a total of  1.45  from holding CosmoSteel Holdings Limited or generate 22.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

CosmoSteel Holdings Limited  vs.  AUSTEVOLL SEAFOOD

CosmoSteel Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CosmoSteel Holdings Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CosmoSteel Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

AUSTEVOLL SEAFOOD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AUSTEVOLL SEAFOOD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AUSTEVOLL SEAFOOD may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CosmoSteel Holdings and AUSTEVOLL SEAFOOD

The main advantage of trading using opposite CosmoSteel Holdings and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD will offset losses from the drop in AUSTEVOLL SEAFOOD's long position.

The idea behind CosmoSteel Holdings Limited and AUSTEVOLL SEAFOOD 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.