Correlation Between COSMO FIRST and Golden Tobacco
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By analyzing existing cross correlation between COSMO FIRST LIMITED and Golden Tobacco Limited, you can compare the effects of market volatilities on COSMO FIRST and Golden Tobacco 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 COSMO FIRST with a short position of Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMO FIRST and Golden Tobacco.
Diversification Opportunities for COSMO FIRST and Golden Tobacco
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COSMO and Golden is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding COSMO FIRST LIMITED and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco and COSMO FIRST 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 COSMO FIRST LIMITED are associated (or correlated) with Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of COSMO FIRST i.e., COSMO FIRST and Golden Tobacco go up and down completely randomly.
Pair Corralation between COSMO FIRST and Golden Tobacco
Assuming the 90 days trading horizon COSMO FIRST LIMITED is expected to generate 1.74 times more return on investment than Golden Tobacco. However, COSMO FIRST is 1.74 times more volatile than Golden Tobacco Limited. It trades about 0.23 of its potential returns per unit of risk. Golden Tobacco Limited is currently generating about -0.01 per unit of risk. If you would invest 75,290 in COSMO FIRST LIMITED on September 25, 2024 and sell it today you would earn a total of 17,035 from holding COSMO FIRST LIMITED or generate 22.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
COSMO FIRST LIMITED vs. Golden Tobacco Limited
Performance |
Timeline |
COSMO FIRST LIMITED |
Golden Tobacco |
COSMO FIRST and Golden Tobacco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COSMO FIRST and Golden Tobacco
The main advantage of trading using opposite COSMO FIRST and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMO FIRST position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.COSMO FIRST vs. Aarey Drugs Pharmaceuticals | COSMO FIRST vs. Zota Health Care | COSMO FIRST vs. Total Transport Systems | COSMO FIRST vs. HDFC Life Insurance |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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