Correlation Between Cosmax and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Cosmax and Sung Bo 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 Cosmax and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmax Inc and Sung Bo Chemicals, you can compare the effects of market volatilities on Cosmax and Sung Bo 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 Cosmax with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmax and Sung Bo.
Diversification Opportunities for Cosmax and Sung Bo
Very good diversification
The 3 months correlation between Cosmax and Sung is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cosmax Inc and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Cosmax 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 Cosmax Inc are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Cosmax i.e., Cosmax and Sung Bo go up and down completely randomly.
Pair Corralation between Cosmax and Sung Bo
Assuming the 90 days trading horizon Cosmax Inc is expected to generate 1.91 times more return on investment than Sung Bo. However, Cosmax is 1.91 times more volatile than Sung Bo Chemicals. It trades about 0.06 of its potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.02 per unit of risk. If you would invest 6,395,361 in Cosmax Inc on August 28, 2024 and sell it today you would earn a total of 7,004,639 from holding Cosmax Inc or generate 109.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmax Inc vs. Sung Bo Chemicals
Performance |
| Timeline |
| Cosmax Inc |
| Sung Bo Chemicals |
Cosmax and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmax and Sung Bo
The main advantage of trading using opposite Cosmax and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmax position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Cosmax vs. Korea Investment Holdings | Cosmax vs. Lotte Energy Materials | Cosmax vs. Hyundai Engineering Plastics | Cosmax vs. RF Materials Co |
| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo vs. Microfriend |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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