Correlation Between COSMOSTEEL HLDGS and PT Bank

Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS 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 HLDGS 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 HLDGS and PT Bank Rakyat, you can compare the effects of market volatilities on COSMOSTEEL HLDGS 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 HLDGS with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and PT Bank.

Diversification Opportunities for COSMOSTEEL HLDGS and PT Bank

-0.27

Correlation Coefficient

COSMOSTEEL HLDGS  PT Bank

Very good diversification

The 3 months correlation between COSMOSTEEL and BYRA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 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 Rakyat has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and PT Bank go up and down completely randomly.

Pair Corralation between COSMOSTEEL HLDGS and PT Bank

Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 0.49 times more return on investment than PT Bank. However, COSMOSTEEL HLDGS is 2.03 times less risky than PT Bank. It trades about 0.1 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.0 per unit of risk. If you would invest  6.50  in COSMOSTEEL HLDGS on December 24, 2024 and sell it today you would earn a total of  1.35  from holding COSMOSTEEL HLDGS or generate 20.77% return on investment over 90 days.

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

COSMOSTEEL HLDGS  vs.  PT Bank Rakyat

COSMOSTEEL HLDGS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 8 (%) 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.

PT Bank Rakyat

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PT Bank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with COSMOSTEEL HLDGS and PT Bank

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

The idea behind COSMOSTEEL HLDGS and PT Bank Rakyat 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..