Correlation Between Apex Healthcare and Cosmos Technology

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

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

Diversification Opportunities for Apex Healthcare and Cosmos Technology

0.42

Correlation Coefficient

Apex Healthcare  Cosmos Technology

Very weak diversification

The 3 months correlation between Apex and Cosmos is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Apex Healthcare 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 Apex Healthcare 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 Apex Healthcare 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 Apex Healthcare i.e., Apex Healthcare and Cosmos Technology go up and down completely randomly.

Pair Corralation between Apex Healthcare and Cosmos Technology

Assuming the 90 days trading horizon Apex Healthcare Bhd is expected to under-perform the Cosmos Technology. But the stock apears to be less risky and, when comparing its historical volatility, Apex Healthcare Bhd is 2.38 times less risky than Cosmos Technology. The stock trades about -0.15 of its potential returns per unit of risk. The Cosmos Technology International is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Cosmos Technology International on August 31, 2024 and sell it today you would lose (1.00) from holding Cosmos Technology International or give up 2.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Apex Healthcare Bhd  vs.  Cosmos Technology Internationa

Apex Healthcare Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Healthcare Bhd 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.

Cosmos Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cosmos Technology International has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Apex Healthcare and Cosmos Technology

The main advantage of trading using opposite Apex Healthcare and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Healthcare 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 Apex Healthcare 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.