Correlation Between COSMOSTEEL HLDGS and Sekisui Chemical

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

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

Diversification Opportunities for COSMOSTEEL HLDGS and Sekisui Chemical

-0.46

Correlation Coefficient

COSMOSTEEL HLDGS  Sekisui Chemical

Very good diversification

The 3 months correlation between COSMOSTEEL and Sekisui is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Sekisui Chemical go up and down completely randomly.

Pair Corralation between COSMOSTEEL HLDGS and Sekisui Chemical

Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to under-perform the Sekisui Chemical. In addition to that, COSMOSTEEL HLDGS is 1.15 times more volatile than Sekisui Chemical Co. It trades about 0.0 of its total potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.07 per unit of volatility. If you would invest  1,300  in Sekisui Chemical Co on September 1, 2024 and sell it today you would earn a total of  200.00  from holding Sekisui Chemical Co or generate 15.38% return on investment over 90 days.

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

COSMOSTEEL HLDGS  vs.  Sekisui Chemical Co

COSMOSTEEL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COSMOSTEEL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Sekisui Chemical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sekisui Chemical Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Sekisui Chemical may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with COSMOSTEEL HLDGS and Sekisui Chemical

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

The idea behind COSMOSTEEL HLDGS and Sekisui Chemical Co 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.