Correlation Between Ho Hup and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Ho Hup and Cosmos 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 Ho Hup and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ho Hup Construction and Cosmos Technology International, you can compare the effects of market volatilities on Ho Hup and Cosmos 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 Ho Hup with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ho Hup and Cosmos Technology.
Diversification Opportunities for Ho Hup and Cosmos Technology
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 5169 and Cosmos is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ho Hup Construction and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Ho Hup 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 Ho Hup Construction are associated (or correlated) with Cosmos Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Technology has no effect on the direction of Ho Hup i.e., Ho Hup and Cosmos Technology go up and down completely randomly.
Pair Corralation between Ho Hup and Cosmos Technology
Assuming the 90 days trading horizon Ho Hup Construction is expected to generate 2.25 times more return on investment than Cosmos Technology. However, Ho Hup is 2.25 times more volatile than Cosmos Technology International. It trades about 0.1 of its potential returns per unit of risk. Cosmos Technology International is currently generating about 0.01 per unit of risk. If you would invest 15.00 in Ho Hup Construction on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Ho Hup Construction or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ho Hup Construction vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Ho Hup Construction |
| Cosmos Technology |
Ho Hup and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ho Hup and Cosmos Technology
The main advantage of trading using opposite Ho Hup and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ho Hup position performs unexpectedly, Cosmos 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 Cosmos Technology will offset losses from the drop in Cosmos Technology's long position.| Ho Hup vs. Binasat Communications Bhd | Ho Hup vs. Southern Steel Bhd | Ho Hup vs. Malayan Banking Bhd | Ho Hup vs. Mycron Steel Bhd |
| Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Impiana Hotels Bhd | Cosmos Technology vs. Mycron Steel Bhd | Cosmos Technology vs. Sports Toto Berhad |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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