Correlation Between Binasat Communications and Cosmos Technology

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

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

Diversification Opportunities for Binasat Communications and Cosmos Technology

-0.1

Correlation Coefficient

Binasat Communications  Cosmos Technology

Good diversification

The 3 months correlation between Binasat and Cosmos is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Technology and Binasat Communications 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 Binasat Communications Bhd are associated (or correlated) with Cosmos Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Technology has no effect on the direction of Binasat Communications i.e., Binasat Communications and Cosmos Technology go up and down completely randomly.

Pair Corralation between Binasat Communications and Cosmos Technology

Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the Cosmos Technology. In addition to that, Binasat Communications is 1.21 times more volatile than Cosmos Technology International. It trades about -0.02 of its total potential returns per unit of risk. Cosmos Technology International is currently generating about 0.03 per unit of volatility. If you would invest  38.00  in Cosmos Technology International on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Cosmos Technology International or generate 2.63% return on investment over 90 days.

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

Binasat Communications Bhd  vs.  Cosmos Technology Internationa

Binasat Communications

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cosmos Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Technology International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cosmos Technology is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Binasat Communications and Cosmos Technology

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

The idea behind Binasat Communications Bhd and Cosmos Technology International 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.