Correlation Between Sunshine Biopharma and Cosmos Health

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

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

Diversification Opportunities for Sunshine Biopharma and Cosmos Health

0.28

Correlation Coefficient

Sunshine Biopharma  Cosmos Health

Modest diversification

The 3 months correlation between Sunshine and Cosmos is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma and Cosmos Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Health and Sunshine Biopharma 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 Sunshine Biopharma are associated (or correlated) with Cosmos Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Health has no effect on the direction of Sunshine Biopharma i.e., Sunshine Biopharma and Cosmos Health go up and down completely randomly.

Pair Corralation between Sunshine Biopharma and Cosmos Health

Given the investment horizon of 90 days Sunshine Biopharma is expected to generate 1.05 times more return on investment than Cosmos Health. However, Sunshine Biopharma is 1.05 times more volatile than Cosmos Health. It trades about 0.03 of its potential returns per unit of risk. Cosmos Health is currently generating about -0.09 per unit of risk. If you would invest  283.00  in Sunshine Biopharma on September 3, 2024 and sell it today you would earn a total of  3.00  from holding Sunshine Biopharma or generate 1.06% return on investment over 90 days.

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

Sunshine Biopharma  vs.  Cosmos Health

Sunshine Biopharma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunshine Biopharma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Sunshine Biopharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cosmos Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cosmos Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sunshine Biopharma and Cosmos Health

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

The idea behind Sunshine Biopharma and Cosmos Health 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.