Correlation Between Cosmos Technology and Telekom Malaysia
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Telekom Malaysia 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 Telekom Malaysia 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 Telekom Malaysia Bhd, you can compare the effects of market volatilities on Cosmos Technology and Telekom Malaysia 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 Telekom Malaysia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Telekom Malaysia.
Diversification Opportunities for Cosmos Technology and Telekom Malaysia
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cosmos and Telekom is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Telekom Malaysia Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Malaysia Bhd 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 Telekom Malaysia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Malaysia Bhd has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Telekom Malaysia go up and down completely randomly.
Pair Corralation between Cosmos Technology and Telekom Malaysia
Assuming the 90 days trading horizon Cosmos Technology is expected to generate 2.42 times less return on investment than Telekom Malaysia. In addition to that, Cosmos Technology is 2.28 times more volatile than Telekom Malaysia Bhd. It trades about 0.02 of its total potential returns per unit of risk. Telekom Malaysia Bhd is currently generating about 0.1 per unit of volatility. If you would invest 497.00 in Telekom Malaysia Bhd on September 15, 2024 and sell it today you would earn a total of 178.00 from holding Telekom Malaysia Bhd or generate 35.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. Telekom Malaysia Bhd
Performance |
| Timeline |
| Cosmos Technology |
| Telekom Malaysia Bhd |
Cosmos Technology and Telekom Malaysia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and Telekom Malaysia
The main advantage of trading using opposite Cosmos Technology and Telekom Malaysia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Telekom Malaysia 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 Telekom Malaysia will offset losses from the drop in Telekom Malaysia'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 |
| Telekom Malaysia vs. Central Industrial Corp | Telekom Malaysia vs. Farm Price Holdings | Telekom Malaysia vs. Awanbiru Technology Bhd | Telekom Malaysia vs. Press Metal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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