Correlation Between Cosmos Technology and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and PMB Technology 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 PMB Technology 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 PMB Technology Bhd, you can compare the effects of market volatilities on Cosmos Technology and PMB Technology 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 PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and PMB Technology.
Diversification Opportunities for Cosmos Technology and PMB Technology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cosmos and PMB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology 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 PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and PMB Technology go up and down completely randomly.
Pair Corralation between Cosmos Technology and PMB Technology
Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 1.13 times more return on investment than PMB Technology. However, Cosmos Technology is 1.13 times more volatile than PMB Technology Bhd. It trades about 0.01 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.07 per unit of risk. If you would invest 40.00 in Cosmos Technology International on August 31, 2024 and sell it today you would lose (3.00) from holding Cosmos Technology International or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. PMB Technology Bhd
Performance |
| Timeline |
| Cosmos Technology |
| PMB Technology Bhd |
Cosmos Technology and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and PMB Technology
The main advantage of trading using opposite Cosmos Technology and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, PMB Technology 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 PMB Technology will offset losses from the drop in PMB Technology's long position.| Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Impiana Hotels Bhd | Cosmos Technology vs. Mycron Steel Bhd | Cosmos Technology vs. Sports Toto Berhad |
| PMB Technology vs. Pantech Group Holdings | PMB Technology vs. Coraza Integrated Technology | PMB Technology vs. Choo Bee Metal | PMB Technology vs. Eonmetall Group 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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