Correlation Between Sunlight Financial and Cosmos Group

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

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

Diversification Opportunities for Sunlight Financial and Cosmos Group

0.0

Correlation Coefficient

Sunlight Financial  Cosmos Group

Pay attention - limited upside

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

Pair Corralation between Sunlight Financial and Cosmos Group

If you would invest  0.00  in Cosmos Group Holdings on December 29, 2024 and sell it today you would earn a total of  0.01  from holding Cosmos Group Holdings or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sunlight Financial Holdings  vs.  Cosmos Group Holdings

Sunlight Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunlight Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sunlight Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Cosmos Group Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Group Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Cosmos Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunlight Financial and Cosmos Group

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

The idea behind Sunlight Financial Holdings and Cosmos Group Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.