Correlation Between COSMO FIRST and Federal Bank
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By analyzing existing cross correlation between COSMO FIRST LIMITED and The Federal Bank, you can compare the effects of market volatilities on COSMO FIRST and Federal Bank 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 COSMO FIRST with a short position of Federal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMO FIRST and Federal Bank.
Diversification Opportunities for COSMO FIRST and Federal Bank
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COSMO and Federal is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding COSMO FIRST LIMITED and The Federal Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Bank and COSMO FIRST 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 COSMO FIRST LIMITED are associated (or correlated) with Federal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Bank has no effect on the direction of COSMO FIRST i.e., COSMO FIRST and Federal Bank go up and down completely randomly.
Pair Corralation between COSMO FIRST and Federal Bank
Assuming the 90 days trading horizon COSMO FIRST LIMITED is expected to generate 2.98 times more return on investment than Federal Bank. However, COSMO FIRST is 2.98 times more volatile than The Federal Bank. It trades about 0.23 of its potential returns per unit of risk. The Federal Bank is currently generating about -0.23 per unit of risk. If you would invest 75,290 in COSMO FIRST LIMITED on September 25, 2024 and sell it today you would earn a total of 17,035 from holding COSMO FIRST LIMITED or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMO FIRST LIMITED vs. The Federal Bank
Performance |
| Timeline |
| COSMO FIRST LIMITED |
| Federal Bank |
COSMO FIRST and Federal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMO FIRST and Federal Bank
The main advantage of trading using opposite COSMO FIRST and Federal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMO FIRST position performs unexpectedly, Federal Bank 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 Federal Bank will offset losses from the drop in Federal Bank's long position.| COSMO FIRST vs. NMDC Limited | COSMO FIRST vs. Steel Authority of | COSMO FIRST vs. Embassy Office Parks | COSMO FIRST vs. Gujarat Narmada Valley |
| Federal Bank vs. Bajaj Holdings Investment | Federal Bank vs. POWERGRID Infrastructure Investment | Federal Bank vs. Welspun Investments and | Federal Bank vs. BF Investment Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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