Correlation Between Cogstate and Cloud DX

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

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

Diversification Opportunities for Cogstate and Cloud DX

0.0

Correlation Coefficient

Cogstate  Cloud DX

Pay attention - limited upside

The 3 months correlation between Cogstate and Cloud is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cogstate Limited and Cloud DX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud DX and Cogstate 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 Cogstate Limited are associated (or correlated) with Cloud DX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud DX has no effect on the direction of Cogstate i.e., Cogstate and Cloud DX go up and down completely randomly.

Pair Corralation between Cogstate and Cloud DX

Assuming the 90 days horizon Cogstate Limited is expected to under-perform the Cloud DX. But the otc stock apears to be less risky and, when comparing its historical volatility, Cogstate Limited is 2.54 times less risky than Cloud DX. The otc stock trades about 0.0 of its potential returns per unit of risk. The Cloud DX is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Cloud DX on September 3, 2024 and sell it today you would lose (2.60) from holding Cloud DX or give up 23.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Cogstate Limited  vs.  Cloud DX

Cogstate Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cogstate Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Cogstate reported solid returns over the last few months and may actually be approaching a breakup point.

Cloud DX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cloud DX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Cloud DX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cogstate and Cloud DX

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

The idea behind Cogstate Limited and Cloud DX 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.

Check out your portfolio center.

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.