Correlation Between Shangri La and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Shangri La 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 Shangri La and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shangri La Hotels and Cosmos Technology International, you can compare the effects of market volatilities on Shangri La 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 Shangri La with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and Cosmos Technology.
Diversification Opportunities for Shangri La and Cosmos Technology
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shangri and Cosmos is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotels and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Shangri La 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 Shangri La Hotels 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 Shangri La i.e., Shangri La and Cosmos Technology go up and down completely randomly.
Pair Corralation between Shangri La and Cosmos Technology
Assuming the 90 days trading horizon Shangri La Hotels is expected to generate 0.49 times more return on investment than Cosmos Technology. However, Shangri La Hotels is 2.03 times less risky than Cosmos Technology. It trades about -0.07 of its potential returns per unit of risk. Cosmos Technology International is currently generating about -0.07 per unit of risk. If you would invest 229.00 in Shangri La Hotels on September 3, 2024 and sell it today you would lose (26.00) from holding Shangri La Hotels or give up 11.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shangri La Hotels vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Shangri La Hotels |
| Cosmos Technology |
Shangri La and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and Cosmos Technology
The main advantage of trading using opposite Shangri La and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La 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.| Shangri La vs. Rubberex M | Shangri La vs. Kossan Rubber Industries | Shangri La vs. K One Technology Bhd | Shangri La vs. CSC Steel Holdings |
| Cosmos Technology vs. Mercury Industries Bhd | Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Senheng New Retail | Cosmos Technology vs. Choo Bee Metal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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