Correlation Between COSMO FIRST and LLOYDS METALS

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

By analyzing existing cross correlation between COSMO FIRST LIMITED and LLOYDS METALS AND, you can compare the effects of market volatilities on COSMO FIRST and LLOYDS METALS 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 COSMO FIRST with a short position of LLOYDS METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMO FIRST and LLOYDS METALS.

Diversification Opportunities for COSMO FIRST and LLOYDS METALS

0.76

Correlation Coefficient

COSMO FIRST  LLOYDS METALS

Poor diversification

The 3 months correlation between COSMO and LLOYDS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding COSMO FIRST LIMITED and LLOYDS METALS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS METALS AND and COSMO FIRST 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 COSMO FIRST LIMITED are associated (or correlated) with LLOYDS METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS METALS AND has no effect on the direction of COSMO FIRST i.e., COSMO FIRST and LLOYDS METALS go up and down completely randomly.

Pair Corralation between COSMO FIRST and LLOYDS METALS

Assuming the 90 days trading horizon COSMO FIRST LIMITED is expected to under-perform the LLOYDS METALS. But the stock apears to be less risky and, when comparing its historical volatility, COSMO FIRST LIMITED is 1.06 times less risky than LLOYDS METALS. The stock trades about -0.2 of its potential returns per unit of risk. The LLOYDS METALS AND is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  118,180  in LLOYDS METALS AND on December 27, 2024 and sell it today you would earn a total of  8,440  from holding LLOYDS METALS AND or generate 7.14% return on investment over 90 days.

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

COSMO FIRST LIMITED  vs.  LLOYDS METALS AND

COSMO FIRST LIMITED

Risk-Adjusted Performance

Very Weak

Over the last 90 days COSMO FIRST LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

LLOYDS METALS AND

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, LLOYDS METALS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with COSMO FIRST and LLOYDS METALS

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

The idea behind COSMO FIRST LIMITED and LLOYDS METALS AND 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.