Correlation Between Biofil Chemicals and COSMO FIRST

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

By analyzing existing cross correlation between Biofil Chemicals Pharmaceuticals and COSMO FIRST LIMITED, you can compare the effects of market volatilities on Biofil Chemicals and COSMO FIRST 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 Biofil Chemicals with a short position of COSMO FIRST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofil Chemicals and COSMO FIRST.

Diversification Opportunities for Biofil Chemicals and COSMO FIRST

-0.09

Correlation Coefficient

Biofil Chemicals  COSMO FIRST

Good diversification

The 3 months correlation between Biofil and COSMO is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Biofil Chemicals Pharmaceutica and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST LIMITED and Biofil Chemicals 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 Biofil Chemicals Pharmaceuticals are associated (or correlated) with COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of Biofil Chemicals i.e., Biofil Chemicals and COSMO FIRST go up and down completely randomly.

Pair Corralation between Biofil Chemicals and COSMO FIRST

Assuming the 90 days trading horizon Biofil Chemicals is expected to generate 4.4 times less return on investment than COSMO FIRST. In addition to that, Biofil Chemicals is 1.91 times more volatile than COSMO FIRST LIMITED. It trades about 0.01 of its total potential returns per unit of risk. COSMO FIRST LIMITED is currently generating about 0.09 per unit of volatility. If you would invest  80,705  in COSMO FIRST LIMITED on September 12, 2024 and sell it today you would earn a total of  9,195  from holding COSMO FIRST LIMITED or generate 11.39% return on investment over 90 days.

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

Biofil Chemicals Pharmaceutica  vs.  COSMO FIRST LIMITED

Biofil Chemicals Pha

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Biofil Chemicals Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Biofil Chemicals is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

COSMO FIRST LIMITED

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COSMO FIRST LIMITED are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, COSMO FIRST may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Biofil Chemicals and COSMO FIRST

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

The idea behind Biofil Chemicals Pharmaceuticals and COSMO FIRST LIMITED 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..