Correlation Between Cosmos Technology and Daya Materials

Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Daya Materials 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 Cosmos Technology and Daya Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cosmos Technology International and Daya Materials Bhd, you can compare the effects of market volatilities on Cosmos Technology and Daya Materials 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 Cosmos Technology with a short position of Daya Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Daya Materials.

Diversification Opportunities for Cosmos Technology and Daya Materials

-0.25

Correlation Coefficient

Cosmos Technology  Daya Materials

Very good diversification

The 3 months correlation between Cosmos and Daya is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Daya Materials Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daya Materials Bhd and Cosmos Technology 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 Cosmos Technology International are associated (or correlated) with Daya Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daya Materials Bhd has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Daya Materials go up and down completely randomly.

Pair Corralation between Cosmos Technology and Daya Materials

Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 0.34 times more return on investment than Daya Materials. However, Cosmos Technology International is 2.98 times less risky than Daya Materials. It trades about 0.13 of its potential returns per unit of risk. Daya Materials Bhd is currently generating about 0.03 per unit of risk. If you would invest  40.00  in Cosmos Technology International on October 10, 2024 and sell it today you would earn a total of  2.00  from holding Cosmos Technology International or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cosmos Technology Internationa  vs.  Daya Materials Bhd

Cosmos Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Technology International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Cosmos Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Daya Materials Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daya Materials Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cosmos Technology and Daya Materials

The main advantage of trading using opposite Cosmos Technology and Daya Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Daya Materials 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 Daya Materials will offset losses from the drop in Daya Materials' long position.

The idea behind Cosmos Technology International and Daya Materials Bhd 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.