Correlation Between COSMOSTEEL HLDGS and HeidelbergCement

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

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

Diversification Opportunities for COSMOSTEEL HLDGS and HeidelbergCement

-0.44

Correlation Coefficient

COSMOSTEEL HLDGS  HeidelbergCement

Very good diversification

The 3 months correlation between COSMOSTEEL and HeidelbergCement is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and HeidelbergCement AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeidelbergCement 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 HeidelbergCement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeidelbergCement has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and HeidelbergCement go up and down completely randomly.

Pair Corralation between COSMOSTEEL HLDGS and HeidelbergCement

Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 6.68 times less return on investment than HeidelbergCement. In addition to that, COSMOSTEEL HLDGS is 1.45 times more volatile than HeidelbergCement AG. It trades about 0.03 of its total potential returns per unit of risk. HeidelbergCement AG is currently generating about 0.27 per unit of volatility. If you would invest  9,266  in HeidelbergCement AG on September 4, 2024 and sell it today you would earn a total of  2,734  from holding HeidelbergCement AG or generate 29.51% 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.  HeidelbergCement AG

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

HeidelbergCement

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HeidelbergCement AG are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward indicators, HeidelbergCement unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSMOSTEEL HLDGS and HeidelbergCement

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

The idea behind COSMOSTEEL HLDGS and HeidelbergCement AG 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.