Correlation Between Radiant Globaltech and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Radiant Globaltech 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 Radiant Globaltech and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radiant Globaltech Bhd and Cosmos Technology International, you can compare the effects of market volatilities on Radiant Globaltech 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 Radiant Globaltech with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Globaltech and Cosmos Technology.
Diversification Opportunities for Radiant Globaltech and Cosmos Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Radiant and Cosmos is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Globaltech 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 Radiant Globaltech 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 Radiant Globaltech 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 Radiant Globaltech i.e., Radiant Globaltech and Cosmos Technology go up and down completely randomly.
Pair Corralation between Radiant Globaltech and Cosmos Technology
Assuming the 90 days trading horizon Radiant Globaltech Bhd is expected to generate 0.84 times more return on investment than Cosmos Technology. However, Radiant Globaltech Bhd is 1.19 times less risky than Cosmos Technology. It trades about 0.01 of its potential returns per unit of risk. Cosmos Technology International is currently generating about -0.02 per unit of risk. If you would invest 35.00 in Radiant Globaltech Bhd on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Radiant Globaltech Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.55% |
| Values | Daily Returns |
Radiant Globaltech Bhd vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Radiant Globaltech Bhd |
| Cosmos Technology |
Radiant Globaltech and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Globaltech and Cosmos Technology
The main advantage of trading using opposite Radiant Globaltech and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Globaltech 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.The idea behind Radiant Globaltech Bhd and Cosmos Technology International 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.| Cosmos Technology vs. Malayan Banking Bhd | Cosmos Technology vs. Public Bank Bhd | Cosmos Technology vs. Petronas Chemicals Group | Cosmos Technology vs. Tenaga Nasional 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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