Correlation Between Cosmos Technology and Hengyuan Refining
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Hengyuan Refining 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 Hengyuan Refining 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 Hengyuan Refining, you can compare the effects of market volatilities on Cosmos Technology and Hengyuan Refining 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 Hengyuan Refining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Hengyuan Refining.
Diversification Opportunities for Cosmos Technology and Hengyuan Refining
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cosmos and Hengyuan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Hengyuan Refining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengyuan Refining 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 Hengyuan Refining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengyuan Refining has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Hengyuan Refining go up and down completely randomly.
Pair Corralation between Cosmos Technology and Hengyuan Refining
Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 1.11 times more return on investment than Hengyuan Refining. However, Cosmos Technology is 1.11 times more volatile than Hengyuan Refining. It trades about 0.01 of its potential returns per unit of risk. Hengyuan Refining is currently generating about -0.05 per unit of risk. If you would invest 39.00 in Cosmos Technology International on September 4, 2024 and sell it today you would lose (1.00) from holding Cosmos Technology International or give up 2.56% 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. Hengyuan Refining
Performance |
| Timeline |
| Cosmos Technology |
| Hengyuan Refining |
Cosmos Technology and Hengyuan Refining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and Hengyuan Refining
The main advantage of trading using opposite Cosmos Technology and Hengyuan Refining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Hengyuan Refining 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 Hengyuan Refining will offset losses from the drop in Hengyuan Refining's 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 |
| Hengyuan Refining vs. K One Technology Bhd | Hengyuan Refining vs. Icon Offshore Bhd | Hengyuan Refining vs. Cosmos Technology International | Hengyuan Refining vs. Homeritz 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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