Correlation Between Cytogen and COWELL FASHION

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

By analyzing existing cross correlation between Cytogen and COWELL FASHION CoLtd, you can compare the effects of market volatilities on Cytogen and COWELL FASHION 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 Cytogen with a short position of COWELL FASHION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cytogen and COWELL FASHION.

Diversification Opportunities for Cytogen and COWELL FASHION

0.04

Correlation Coefficient

Cytogen  COWELL FASHION

Significant diversification

The 3 months correlation between Cytogen and COWELL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cytogen and COWELL FASHION CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWELL FASHION CoLtd and Cytogen 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 Cytogen are associated (or correlated) with COWELL FASHION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWELL FASHION CoLtd has no effect on the direction of Cytogen i.e., Cytogen and COWELL FASHION go up and down completely randomly.

Pair Corralation between Cytogen and COWELL FASHION

Assuming the 90 days trading horizon Cytogen is expected to under-perform the COWELL FASHION. In addition to that, Cytogen is 1.82 times more volatile than COWELL FASHION CoLtd. It trades about -0.13 of its total potential returns per unit of risk. COWELL FASHION CoLtd is currently generating about -0.06 per unit of volatility. If you would invest  220,500  in COWELL FASHION CoLtd on December 24, 2024 and sell it today you would lose (11,500) from holding COWELL FASHION CoLtd or give up 5.22% of portfolio value over 90 days.

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

Cytogen  vs.  COWELL FASHION CoLtd

Cytogen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cytogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

COWELL FASHION CoLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days COWELL FASHION CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, COWELL FASHION is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cytogen and COWELL FASHION

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

The idea behind Cytogen and COWELL FASHION CoLtd 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.