Correlation Between Cosmos Technology and Petronas Chemicals
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Petronas Chemicals 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 Petronas Chemicals 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 Petronas Chemicals Group, you can compare the effects of market volatilities on Cosmos Technology and Petronas Chemicals 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 Petronas Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Petronas Chemicals.
Diversification Opportunities for Cosmos Technology and Petronas Chemicals
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cosmos and Petronas is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Petronas Chemicals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petronas Chemicals 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 Petronas Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petronas Chemicals has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Petronas Chemicals go up and down completely randomly.
Pair Corralation between Cosmos Technology and Petronas Chemicals
Assuming the 90 days trading horizon Cosmos Technology International is expected to under-perform the Petronas Chemicals. In addition to that, Cosmos Technology is 1.04 times more volatile than Petronas Chemicals Group. It trades about -0.04 of its total potential returns per unit of risk. Petronas Chemicals Group is currently generating about -0.02 per unit of volatility. If you would invest 472.00 in Petronas Chemicals Group on October 25, 2024 and sell it today you would lose (7.00) from holding Petronas Chemicals Group or give up 1.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cosmos Technology Internationa vs. Petronas Chemicals Group
Performance |
Timeline |
Cosmos Technology |
Petronas Chemicals |
Cosmos Technology and Petronas Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cosmos Technology and Petronas Chemicals
The main advantage of trading using opposite Cosmos Technology and Petronas Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Petronas Chemicals 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 Petronas Chemicals will offset losses from the drop in Petronas Chemicals' long position.Cosmos Technology vs. Datasonic Group Bhd | Cosmos Technology vs. Kossan Rubber Industries | Cosmos Technology vs. Computer Forms Bhd | Cosmos Technology vs. Melewar Industrial Group |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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