Correlation Between COSMO FIRST and Mangalam Drugs

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

By analyzing existing cross correlation between COSMO FIRST LIMITED and Mangalam Drugs And, you can compare the effects of market volatilities on COSMO FIRST and Mangalam Drugs 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 Mangalam Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMO FIRST and Mangalam Drugs.

Diversification Opportunities for COSMO FIRST and Mangalam Drugs

0.29

Correlation Coefficient

COSMO FIRST  Mangalam Drugs

Modest diversification

The 3 months correlation between COSMO and Mangalam is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding COSMO FIRST LIMITED and Mangalam Drugs And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangalam Drugs And 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 Mangalam Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangalam Drugs And has no effect on the direction of COSMO FIRST i.e., COSMO FIRST and Mangalam Drugs go up and down completely randomly.

Pair Corralation between COSMO FIRST and Mangalam Drugs

Assuming the 90 days trading horizon COSMO FIRST LIMITED is expected to generate 0.91 times more return on investment than Mangalam Drugs. However, COSMO FIRST LIMITED is 1.1 times less risky than Mangalam Drugs. It trades about 0.04 of its potential returns per unit of risk. Mangalam Drugs And is currently generating about -0.08 per unit of risk. If you would invest  79,710  in COSMO FIRST LIMITED on September 16, 2024 and sell it today you would earn a total of  3,995  from holding COSMO FIRST LIMITED or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

COSMO FIRST LIMITED  vs.  Mangalam Drugs And

COSMO FIRST LIMITED

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COSMO FIRST LIMITED are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, COSMO FIRST may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mangalam Drugs And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mangalam Drugs And has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with COSMO FIRST and Mangalam Drugs

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

The idea behind COSMO FIRST LIMITED and Mangalam Drugs And 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..