Correlation Between Cosmos Technology and Oriental Food

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

Diversification Opportunities for Cosmos Technology and Oriental Food

-0.54

Correlation Coefficient

Cosmos Technology  Oriental Food

Excellent diversification

The 3 months correlation between Cosmos and Oriental is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Oriental Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Food Industries 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 Oriental Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Food Industries has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Oriental Food go up and down completely randomly.

Pair Corralation between Cosmos Technology and Oriental Food

Assuming the 90 days trading horizon Cosmos Technology International is expected to under-perform the Oriental Food. In addition to that, Cosmos Technology is 1.15 times more volatile than Oriental Food Industries. It trades about 0.0 of its total potential returns per unit of risk. Oriental Food Industries is currently generating about 0.04 per unit of volatility. If you would invest  119.00  in Oriental Food Industries on October 4, 2024 and sell it today you would earn a total of  45.00  from holding Oriental Food Industries or generate 37.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.52%
Values	Daily Returns

Cosmos Technology Internationa  vs.  Oriental Food Industries

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.

Oriental Food Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oriental Food Industries 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 Oriental Food

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

The idea behind Cosmos Technology International and Oriental Food Industries 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.