Correlation Between Cosmos Technology and SFP Tech
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and SFP Tech 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 SFP Tech 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 SFP Tech Holdings, you can compare the effects of market volatilities on Cosmos Technology and SFP Tech 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 SFP Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and SFP Tech.
Diversification Opportunities for Cosmos Technology and SFP Tech
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cosmos and SFP is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and SFP Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFP Tech Holdings 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 SFP Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFP Tech Holdings has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and SFP Tech go up and down completely randomly.
Pair Corralation between Cosmos Technology and SFP Tech
Assuming the 90 days trading horizon Cosmos Technology is expected to generate 2.11 times less return on investment than SFP Tech. But when comparing it to its historical volatility, Cosmos Technology International is 1.08 times less risky than SFP Tech. It trades about 0.01 of its potential returns per unit of risk. SFP Tech Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 66.00 in SFP Tech Holdings on August 30, 2024 and sell it today you would earn a total of 1.00 from holding SFP Tech Holdings or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. SFP Tech Holdings
Performance |
| Timeline |
| Cosmos Technology |
| SFP Tech Holdings |
Cosmos Technology and SFP Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and SFP Tech
The main advantage of trading using opposite Cosmos Technology and SFP Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, SFP Tech 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 SFP Tech will offset losses from the drop in SFP Tech's long position.| Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Impiana Hotels Bhd | Cosmos Technology vs. Mycron Steel Bhd | Cosmos Technology vs. Sports Toto Berhad |
| SFP Tech vs. Scientex Packaging | SFP Tech vs. UNIQUE | SFP Tech vs. Dnonce Tech Bhd | SFP Tech vs. Protasco 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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