Correlation Between Cosmos Technology and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Kossan Rubber 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 Kossan Rubber 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 Kossan Rubber Industries, you can compare the effects of market volatilities on Cosmos Technology and Kossan Rubber 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 Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Kossan Rubber.
Diversification Opportunities for Cosmos Technology and Kossan Rubber
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cosmos and Kossan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Kossan Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kossan Rubber Industries 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 Kossan Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kossan Rubber Industries has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Kossan Rubber go up and down completely randomly.
Pair Corralation between Cosmos Technology and Kossan Rubber
Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 0.77 times more return on investment than Kossan Rubber. However, Cosmos Technology International is 1.31 times less risky than Kossan Rubber. It trades about -0.15 of its potential returns per unit of risk. Kossan Rubber Industries is currently generating about -0.34 per unit of risk. If you would invest 42.00 in Cosmos Technology International on November 3, 2024 and sell it today you would lose (3.00) from holding Cosmos Technology International or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. Kossan Rubber Industries
Performance |
| Timeline |
| Cosmos Technology |
| Kossan Rubber Industries |
Cosmos Technology and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and Kossan Rubber
The main advantage of trading using opposite Cosmos Technology and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Kossan Rubber 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 Kossan Rubber will offset losses from the drop in Kossan Rubber'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 |
| Kossan Rubber vs. Icon Offshore Bhd | Kossan Rubber vs. Globetronics Tech Bhd | Kossan Rubber vs. MI Technovation Bhd | Kossan Rubber vs. Radiant Globaltech 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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