Correlation Between Element Solutions and Cosmos Group
Can any of the company-specific risk be diversified away by investing in both Element Solutions and Cosmos Group 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 Element Solutions and Cosmos Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Element Solutions and Cosmos Group Holdings, you can compare the effects of market volatilities on Element Solutions and Cosmos Group 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 Element Solutions with a short position of Cosmos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Solutions and Cosmos Group.
Diversification Opportunities for Element Solutions and Cosmos Group
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Element and Cosmos is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Element Solutions and Cosmos Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Group Holdings and Element Solutions 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 Element Solutions are associated (or correlated) with Cosmos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Group Holdings has no effect on the direction of Element Solutions i.e., Element Solutions and Cosmos Group go up and down completely randomly.
Pair Corralation between Element Solutions and Cosmos Group
Considering the 90-day investment horizon Element Solutions is expected to generate 115.45 times less return on investment than Cosmos Group. But when comparing it to its historical volatility, Element Solutions is 63.38 times less risky than Cosmos Group. It trades about 0.06 of its potential returns per unit of risk. Cosmos Group Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Cosmos Group Holdings on August 30, 2024 and sell it today you would lose (4.20) from holding Cosmos Group Holdings or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Element Solutions vs. Cosmos Group Holdings
Performance |
| Timeline |
| Element Solutions |
| Cosmos Group Holdings |
Element Solutions and Cosmos Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Element Solutions and Cosmos Group
The main advantage of trading using opposite Element Solutions and Cosmos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Solutions position performs unexpectedly, Cosmos Group 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 Group will offset losses from the drop in Cosmos Group's long position.| Element Solutions vs. Oil Dri | Element Solutions vs. Quaker Chemical | Element Solutions vs. Ecovyst | Element Solutions vs. Minerals Technologies |
| Cosmos Group vs. Deere Company | Cosmos Group vs. Columbus McKinnon | Cosmos Group vs. Hyster Yale Materials Handling | Cosmos Group vs. Manitowoc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |