Correlation Between Cosmos Technology and ES Ceramics
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and ES Ceramics 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 Cosmos Technology and ES Ceramics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmos Technology International and ES Ceramics Technology, you can compare the effects of market volatilities on Cosmos Technology and ES Ceramics 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 Cosmos Technology with a short position of ES Ceramics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and ES Ceramics.
Diversification Opportunities for Cosmos Technology and ES Ceramics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cosmos and 0100 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and ES Ceramics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES Ceramics Technology and Cosmos Technology 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 Cosmos Technology International are associated (or correlated) with ES Ceramics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES Ceramics Technology has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and ES Ceramics go up and down completely randomly.
Pair Corralation between Cosmos Technology and ES Ceramics
Assuming the 90 days trading horizon Cosmos Technology International is expected to under-perform the ES Ceramics. But the stock apears to be less risky and, when comparing its historical volatility, Cosmos Technology International is 1.34 times less risky than ES Ceramics. The stock trades about -0.02 of its potential returns per unit of risk. The ES Ceramics Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20.00 in ES Ceramics Technology on August 27, 2024 and sell it today you would lose (6.00) from holding ES Ceramics Technology or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. ES Ceramics Technology
Performance |
| Timeline |
| Cosmos Technology |
| ES Ceramics Technology |
Cosmos Technology and ES Ceramics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and ES Ceramics
The main advantage of trading using opposite Cosmos Technology and ES Ceramics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, ES Ceramics 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 ES Ceramics will offset losses from the drop in ES Ceramics' long position.| Cosmos Technology vs. Malayan Banking Bhd | Cosmos Technology vs. Public Bank Bhd | Cosmos Technology vs. Petronas Chemicals Group | Cosmos Technology vs. Tenaga Nasional Bhd |
| ES Ceramics vs. Digistar Bhd | ES Ceramics vs. Minetech Resources Bhd | ES Ceramics vs. OpenSys M Bhd | ES Ceramics vs. Insas 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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