Correlation Between Cosmos Technology and Malaysian Resources
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Malaysian Resources 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 Malaysian Resources 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 Malaysian Resources, you can compare the effects of market volatilities on Cosmos Technology and Malaysian Resources 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 Malaysian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Malaysian Resources.
Diversification Opportunities for Cosmos Technology and Malaysian Resources
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cosmos and Malaysian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Malaysian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malaysian Resources 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 Malaysian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malaysian Resources has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Malaysian Resources go up and down completely randomly.
Pair Corralation between Cosmos Technology and Malaysian Resources
Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 1.09 times more return on investment than Malaysian Resources. However, Cosmos Technology is 1.09 times more volatile than Malaysian Resources. It trades about -0.04 of its potential returns per unit of risk. Malaysian Resources is currently generating about -0.16 per unit of risk. If you would invest 38.00 in Cosmos Technology International on August 28, 2024 and sell it today you would lose (1.00) from holding Cosmos Technology International or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. Malaysian Resources
Performance |
| Timeline |
| Cosmos Technology |
| Malaysian Resources |
Cosmos Technology and Malaysian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and Malaysian Resources
The main advantage of trading using opposite Cosmos Technology and Malaysian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Malaysian Resources 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 Malaysian Resources will offset losses from the drop in Malaysian Resources' 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 |
| Malaysian Resources vs. PIE Industrial Bhd | Malaysian Resources vs. YX Precious Metals | Malaysian Resources vs. Cosmos Technology International | Malaysian Resources vs. ES Ceramics Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |