Correlation Between Cosmos Technology and Ho Hup
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Ho Hup 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 Ho Hup 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 Ho Hup Construction, you can compare the effects of market volatilities on Cosmos Technology and Ho Hup 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 Ho Hup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Ho Hup.
Diversification Opportunities for Cosmos Technology and Ho Hup
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cosmos and 5169 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Ho Hup Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ho Hup Construction 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 Ho Hup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ho Hup Construction has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Ho Hup go up and down completely randomly.
Pair Corralation between Cosmos Technology and Ho Hup
Assuming the 90 days trading horizon Cosmos Technology International is expected to under-perform the Ho Hup. But the stock apears to be less risky and, when comparing its historical volatility, Cosmos Technology International is 2.64 times less risky than Ho Hup. The stock trades about -0.1 of its potential returns per unit of risk. The Ho Hup Construction is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Ho Hup Construction on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Ho Hup Construction or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. Ho Hup Construction
Performance |
| Timeline |
| Cosmos Technology |
| Ho Hup Construction |
Cosmos Technology and Ho Hup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and Ho Hup
The main advantage of trading using opposite Cosmos Technology and Ho Hup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Ho Hup 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 Ho Hup will offset losses from the drop in Ho Hup's long position.| Cosmos Technology vs. Malayan Banking Bhd | Cosmos Technology vs. Public Bank Bhd | Cosmos Technology vs. Petronas Chemicals Group | Cosmos Technology vs. IHH Healthcare 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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