Correlation Between Cosmos Technology and MI Technovation
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and MI Technovation 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 MI Technovation 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 MI Technovation Bhd, you can compare the effects of market volatilities on Cosmos Technology and MI Technovation 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 MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and MI Technovation.
Diversification Opportunities for Cosmos Technology and MI Technovation
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cosmos and 5286 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation 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 MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and MI Technovation go up and down completely randomly.
Pair Corralation between Cosmos Technology and MI Technovation
Assuming the 90 days trading horizon Cosmos Technology is expected to generate 5.39 times less return on investment than MI Technovation. But when comparing it to its historical volatility, Cosmos Technology International is 2.19 times less risky than MI Technovation. It trades about 0.1 of its potential returns per unit of risk. MI Technovation Bhd is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 181.00 in MI Technovation Bhd on September 3, 2024 and sell it today you would earn a total of 29.00 from holding MI Technovation Bhd or generate 16.02% 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. MI Technovation Bhd
Performance |
| Timeline |
| Cosmos Technology |
| MI Technovation Bhd |
Cosmos Technology and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and MI Technovation
The main advantage of trading using opposite Cosmos Technology and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| Cosmos Technology vs. Mercury Industries Bhd | Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Senheng New Retail | Cosmos Technology vs. Choo Bee Metal |
| MI Technovation vs. Scientex Packaging | MI Technovation vs. UNIQUE | MI Technovation vs. Dnonce Tech Bhd | MI Technovation vs. Protasco 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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