Correlation Between Choo Bee and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Choo Bee 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 Choo Bee and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choo Bee Metal and Cosmos Technology International, you can compare the effects of market volatilities on Choo Bee 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 Choo Bee with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choo Bee and Cosmos Technology.
Diversification Opportunities for Choo Bee and Cosmos Technology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Choo and Cosmos is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Choo Bee Metal and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Choo Bee 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 Choo Bee Metal 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 Choo Bee i.e., Choo Bee and Cosmos Technology go up and down completely randomly.
Pair Corralation between Choo Bee and Cosmos Technology
Assuming the 90 days trading horizon Choo Bee Metal is expected to under-perform the Cosmos Technology. In addition to that, Choo Bee is 1.1 times more volatile than Cosmos Technology International. It trades about -0.13 of its total potential returns per unit of risk. Cosmos Technology International is currently generating about -0.02 per unit of volatility. If you would invest 38.00 in Cosmos Technology International on August 30, 2024 and sell it today you would lose (1.00) from holding Cosmos Technology International or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Choo Bee Metal vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Choo Bee Metal |
| Cosmos Technology |
Choo Bee and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choo Bee and Cosmos Technology
The main advantage of trading using opposite Choo Bee and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choo Bee 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.The idea behind Choo Bee Metal and Cosmos Technology International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cosmos Technology vs. Malayan Banking Bhd | Cosmos Technology vs. Public Bank Bhd | Cosmos Technology vs. Petronas Chemicals Group | Cosmos Technology vs. IHH Healthcare 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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