Correlation Between Cosmos Technology and EA Technique

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

Diversification Opportunities for Cosmos Technology and EA Technique

0.06

Correlation Coefficient

Cosmos Technology  EA Technique

Significant diversification

The 3 months correlation between Cosmos and 5259 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and EA Technique M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Technique M 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 EA Technique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Technique M has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and EA Technique go up and down completely randomly.

Pair Corralation between Cosmos Technology and EA Technique

Assuming the 90 days trading horizon Cosmos Technology is expected to generate 2.94 times less return on investment than EA Technique. But when comparing it to its historical volatility, Cosmos Technology International is 1.24 times less risky than EA Technique. It trades about 0.03 of its potential returns per unit of risk. EA Technique M is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  30.00  in EA Technique M on November 20, 2024 and sell it today you would earn a total of  3.00  from holding EA Technique M or generate 10.0% return on investment over 90 days.

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

Cosmos Technology Internationa  vs.  EA Technique M

Cosmos Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Technology International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cosmos Technology is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

EA Technique M

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EA Technique M are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, EA Technique may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Cosmos Technology and EA Technique

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

The idea behind Cosmos Technology International and EA Technique M 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.