Correlation Between Cosmos Technology and SSF Home

Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and SSF Home 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 SSF Home 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 SSF Home Group, you can compare the effects of market volatilities on Cosmos Technology and SSF Home 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 SSF Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and SSF Home.

Diversification Opportunities for Cosmos Technology and SSF Home

0.23

Correlation Coefficient

Cosmos Technology  SSF Home

Modest diversification

The 3 months correlation between Cosmos and SSF is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and SSF Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSF Home Group 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 SSF Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSF Home Group has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and SSF Home go up and down completely randomly.

Pair Corralation between Cosmos Technology and SSF Home

Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 1.48 times more return on investment than SSF Home. However, Cosmos Technology is 1.48 times more volatile than SSF Home Group. It trades about 0.1 of its potential returns per unit of risk. SSF Home Group is currently generating about 0.11 per unit of risk. If you would invest  38.00  in Cosmos Technology International on October 8, 2024 and sell it today you would earn a total of  5.00  from holding Cosmos Technology International or generate 13.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cosmos Technology Internationa  vs.  SSF Home Group

Cosmos Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Technology International are ranked lower than 8 (%) 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.

SSF Home Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSF Home Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, SSF Home may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cosmos Technology and SSF Home

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

The idea behind Cosmos Technology International and SSF Home Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.