Correlation Between Duopharma Biotech and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Duopharma Biotech 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 Duopharma Biotech and Cosmos Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duopharma Biotech Bhd and Cosmos Technology International, you can compare the effects of market volatilities on Duopharma Biotech 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 Duopharma Biotech with a short position of Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duopharma Biotech and Cosmos Technology.
Diversification Opportunities for Duopharma Biotech and Cosmos Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Duopharma and Cosmos is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech i.e., Duopharma Biotech and Cosmos Technology go up and down completely randomly.
Pair Corralation between Duopharma Biotech and Cosmos Technology
Assuming the 90 days trading horizon Duopharma Biotech Bhd is expected to under-perform the Cosmos Technology. But the stock apears to be less risky and, when comparing its historical volatility, Duopharma Biotech Bhd is 1.9 times less risky than Cosmos Technology. The stock trades about -0.23 of its potential returns per unit of risk. The Cosmos Technology International is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Cosmos Technology International on August 27, 2024 and sell it today you would lose (2.00) from holding Cosmos Technology International or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duopharma Biotech Bhd vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Duopharma Biotech Bhd |
| Cosmos Technology |
Duopharma Biotech and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duopharma Biotech and Cosmos Technology
The main advantage of trading using opposite Duopharma Biotech and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duopharma Biotech 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.| Duopharma Biotech vs. Digistar Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. OpenSys M Bhd | Duopharma Biotech vs. Insas 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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