Correlation Between Malpac Holdings and Cosmos Technology

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

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

Diversification Opportunities for Malpac Holdings and Cosmos Technology

-0.43

Correlation Coefficient

Malpac Holdings  Cosmos Technology

Very good diversification

The 3 months correlation between Malpac and Cosmos is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Malpac Holdings Bhd and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Malpac Holdings 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 Malpac Holdings Bhd are associated (or correlated) with Cosmos Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Technology has no effect on the direction of Malpac Holdings i.e., Malpac Holdings and Cosmos Technology go up and down completely randomly.

Pair Corralation between Malpac Holdings and Cosmos Technology

Assuming the 90 days trading horizon Malpac Holdings is expected to generate 62.56 times less return on investment than Cosmos Technology. But when comparing it to its historical volatility, Malpac Holdings Bhd is 1.31 times less risky than Cosmos Technology. It trades about 0.01 of its potential returns per unit of risk. Cosmos Technology International is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Cosmos Technology International on October 4, 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Malpac Holdings Bhd  vs.  Cosmos Technology Internationa

Malpac Holdings Bhd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Malpac Holdings Bhd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Malpac Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Malpac Holdings and Cosmos Technology

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

The idea behind Malpac Holdings Bhd and Cosmos Technology International 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.