Correlation Between COSMO FIRST and PNC Infratech

Can any of the company-specific risk be diversified away by investing in both COSMO FIRST and PNC Infratech 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 PNC Infratech 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 PNC Infratech Limited, you can compare the effects of market volatilities on COSMO FIRST and PNC Infratech 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 PNC Infratech. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMO FIRST and PNC Infratech.

Diversification Opportunities for COSMO FIRST and PNC Infratech

0.0

Correlation Coefficient

COSMO FIRST  PNC Infratech

Pay attention - limited upside

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

Pair Corralation between COSMO FIRST and PNC Infratech

Assuming the 90 days trading horizon COSMO FIRST LIMITED is expected to generate 1.2 times more return on investment than PNC Infratech. However, COSMO FIRST is 1.2 times more volatile than PNC Infratech Limited. It trades about 0.05 of its potential returns per unit of risk. PNC Infratech Limited is currently generating about 0.01 per unit of risk. If you would invest  73,370  in COSMO FIRST LIMITED on October 25, 2024 and sell it today you would earn a total of  5,470  from holding COSMO FIRST LIMITED or generate 7.46% return on investment over 90 days.

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

COSMO FIRST LIMITED  vs.  PNC Infratech Limited

COSMO FIRST LIMITED

Risk-Adjusted Performance

3 of 100

Weak

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 unfluctuating basic indicators, COSMO FIRST may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PNC Infratech Limited

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PNC Infratech Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, PNC Infratech is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with COSMO FIRST and PNC Infratech

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

The idea behind COSMO FIRST LIMITED and PNC Infratech 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..