Correlation Between COSMOSTEEL HLDGS and Newmont

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

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

Diversification Opportunities for COSMOSTEEL HLDGS and Newmont

-0.16

Correlation Coefficient

COSMOSTEEL HLDGS  Newmont

Good diversification

The 3 months correlation between COSMOSTEEL and Newmont is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont 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 Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Newmont go up and down completely randomly.

Pair Corralation between COSMOSTEEL HLDGS and Newmont

Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 1.56 times more return on investment than Newmont. However, COSMOSTEEL HLDGS is 1.56 times more volatile than Newmont. It trades about 0.01 of its potential returns per unit of risk. Newmont is currently generating about -0.01 per unit of risk. If you would invest  7.52  in COSMOSTEEL HLDGS on October 11, 2024 and sell it today you would lose (0.92) from holding COSMOSTEEL HLDGS or give up 12.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

COSMOSTEEL HLDGS  vs.  Newmont

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 stable basic indicators, COSMOSTEEL HLDGS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Newmont

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with COSMOSTEEL HLDGS and Newmont

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

The idea behind COSMOSTEEL HLDGS and Newmont 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.