Correlation Between Cosmos Technology and RCE Capital
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and RCE Capital 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 RCE Capital 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 RCE Capital Berhad, you can compare the effects of market volatilities on Cosmos Technology and RCE Capital 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 RCE Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and RCE Capital.
Diversification Opportunities for Cosmos Technology and RCE Capital
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cosmos and RCE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and RCE Capital Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCE Capital Berhad 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 RCE Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCE Capital Berhad has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and RCE Capital go up and down completely randomly.
Pair Corralation between Cosmos Technology and RCE Capital
Assuming the 90 days trading horizon Cosmos Technology International is expected to under-perform the RCE Capital. In addition to that, Cosmos Technology is 1.38 times more volatile than RCE Capital Berhad. It trades about -0.03 of its total potential returns per unit of risk. RCE Capital Berhad is currently generating about 0.05 per unit of volatility. If you would invest 128.00 in RCE Capital Berhad on October 25, 2024 and sell it today you would earn a total of 20.00 from holding RCE Capital Berhad or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.51% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. RCE Capital Berhad
Performance |
| Timeline |
| Cosmos Technology |
| RCE Capital Berhad |
Cosmos Technology and RCE Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and RCE Capital
The main advantage of trading using opposite Cosmos Technology and RCE Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, RCE Capital 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 RCE Capital will offset losses from the drop in RCE Capital's 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 |
| RCE Capital vs. Silver Ridge Holdings | RCE Capital vs. MClean Technologies Bhd | RCE Capital vs. Hong Leong Bank | RCE Capital vs. Alliance Financial Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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