Correlation Between Nicholas Financial and Cosmos Group
Can any of the company-specific risk be diversified away by investing in both Nicholas Financial 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 Nicholas Financial and Cosmos Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicholas Financial and Cosmos Group Holdings, you can compare the effects of market volatilities on Nicholas Financial 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 Nicholas Financial with a short position of Cosmos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicholas Financial and Cosmos Group.
Diversification Opportunities for Nicholas Financial and Cosmos Group
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nicholas and Cosmos is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Financial 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 Nicholas Financial 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 Nicholas Financial 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 Nicholas Financial i.e., Nicholas Financial and Cosmos Group go up and down completely randomly.
Pair Corralation between Nicholas Financial and Cosmos Group
Given the investment horizon of 90 days Nicholas Financial is expected to generate 371.3 times less return on investment than Cosmos Group. But when comparing it to its historical volatility, Nicholas Financial is 35.53 times less risky than Cosmos Group. It trades about 0.01 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 Together |
| Strength | Insignificant |
| Accuracy | 91.31% |
| Values | Daily Returns |
Nicholas Financial vs. Cosmos Group Holdings
Performance |
| Timeline |
| Nicholas Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Cosmos Group Holdings |
Nicholas Financial and Cosmos Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicholas Financial and Cosmos Group
The main advantage of trading using opposite Nicholas Financial and Cosmos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas Financial 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.| Nicholas Financial vs. Regional Management Corp | Nicholas Financial vs. Orix Corp Ads | Nicholas Financial vs. FirstCash | Nicholas Financial vs. Finance of America |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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