Correlation Between Hibiscus Petroleum and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Hibiscus Petroleum 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 Hibiscus Petroleum and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hibiscus Petroleum BHD and Cosmos Technology International, you can compare the effects of market volatilities on Hibiscus Petroleum 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 Hibiscus Petroleum with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hibiscus Petroleum and Cosmos Technology.
Diversification Opportunities for Hibiscus Petroleum and Cosmos Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hibiscus and Cosmos is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hibiscus Petroleum BHD and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Hibiscus Petroleum 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 Hibiscus Petroleum BHD 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 Hibiscus Petroleum i.e., Hibiscus Petroleum and Cosmos Technology go up and down completely randomly.
Pair Corralation between Hibiscus Petroleum and Cosmos Technology
Assuming the 90 days trading horizon Hibiscus Petroleum BHD is expected to under-perform the Cosmos Technology. But the stock apears to be less risky and, when comparing its historical volatility, Hibiscus Petroleum BHD is 1.61 times less risky than Cosmos Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Cosmos Technology International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Cosmos Technology International on September 5, 2024 and sell it today you would lose (10.00) from holding Cosmos Technology International or give up 20.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hibiscus Petroleum BHD vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Hibiscus Petroleum BHD |
| Cosmos Technology |
Hibiscus Petroleum and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hibiscus Petroleum and Cosmos Technology
The main advantage of trading using opposite Hibiscus Petroleum and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hibiscus Petroleum 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.| Hibiscus Petroleum vs. Malaysia Steel Works | Hibiscus Petroleum vs. Silver Ridge Holdings | Hibiscus Petroleum vs. MClean Technologies Bhd | Hibiscus Petroleum vs. Eonmetall Group Bhd |
| Cosmos Technology vs. Malayan Banking Bhd | Cosmos Technology vs. Public Bank Bhd | Cosmos Technology vs. Petronas Chemicals Group | Cosmos Technology vs. Tenaga Nasional 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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