Correlation Between Binasat Communications and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Cosmos Technology 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 Binasat Communications and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and Cosmos Technology International, you can compare the effects of market volatilities on Binasat Communications and Cosmos Technology 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 Binasat Communications with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Cosmos Technology.
Diversification Opportunities for Binasat Communications and Cosmos Technology
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Binasat and Cosmos is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Binasat Communications 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 Binasat Communications Bhd are associated (or correlated) with Cosmos Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Technology has no effect on the direction of Binasat Communications i.e., Binasat Communications and Cosmos Technology go up and down completely randomly.
Pair Corralation between Binasat Communications and Cosmos Technology
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to generate 1.12 times more return on investment than Cosmos Technology. However, Binasat Communications is 1.12 times more volatile than Cosmos Technology International. It trades about -0.03 of its potential returns per unit of risk. Cosmos Technology International is currently generating about -0.06 per unit of risk. If you would invest 25.00 in Binasat Communications Bhd on August 30, 2024 and sell it today you would lose (4.00) from holding Binasat Communications Bhd or give up 16.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Binasat Communications |
| Cosmos Technology |
Binasat Communications and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Cosmos Technology
The main advantage of trading using opposite Binasat Communications and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Cosmos Technology 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 Cosmos Technology will offset losses from the drop in Cosmos Technology's long position.| Binasat Communications vs. Duopharma Biotech Bhd | Binasat Communications vs. ES Ceramics Technology | Binasat Communications vs. Uchi Technologies Bhd | Binasat Communications vs. Oriental Food Industries |
| Cosmos Technology vs. Malayan Banking Bhd | Cosmos Technology vs. Public Bank Bhd | Cosmos Technology vs. Petronas Chemicals Group | Cosmos Technology vs. IHH Healthcare Bhd |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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