Correlation Between COSMOSTEEL HLDGS and NEW MILLENNIUM

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

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

Diversification Opportunities for COSMOSTEEL HLDGS and NEW MILLENNIUM

-0.28

Correlation Coefficient

COSMOSTEEL HLDGS  NEW MILLENNIUM

Very good diversification

The 3 months correlation between COSMOSTEEL and NEW is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and NEW MILLENNIUM IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MILLENNIUM IRON and COSMOSTEEL HLDGS 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 HLDGS are associated (or correlated) with NEW MILLENNIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MILLENNIUM IRON has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and NEW MILLENNIUM go up and down completely randomly.

Pair Corralation between COSMOSTEEL HLDGS and NEW MILLENNIUM

Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to under-perform the NEW MILLENNIUM. In addition to that, COSMOSTEEL HLDGS is 1.15 times more volatile than NEW MILLENNIUM IRON. It trades about -0.12 of its total potential returns per unit of risk. NEW MILLENNIUM IRON is currently generating about -0.04 per unit of volatility. If you would invest  810.00  in NEW MILLENNIUM IRON on October 8, 2024 and sell it today you would lose (15.00) from holding NEW MILLENNIUM IRON or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

COSMOSTEEL HLDGS  vs.  NEW MILLENNIUM IRON

COSMOSTEEL HLDGS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COSMOSTEEL HLDGS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NEW MILLENNIUM IRON

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NEW MILLENNIUM IRON are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NEW MILLENNIUM may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with COSMOSTEEL HLDGS and NEW MILLENNIUM

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

The idea behind COSMOSTEEL HLDGS and NEW MILLENNIUM IRON 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.