Correlation Between Cosmos Group and Finance Of

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

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

Diversification Opportunities for Cosmos Group and Finance Of

-0.5

Correlation Coefficient

Cosmos Group  Finance Of

Very good diversification

The 3 months correlation between Cosmos and Finance is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Group Holdings and Finance of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finance of America and Cosmos Group 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 Cosmos Group Holdings are associated (or correlated) with Finance Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finance of America has no effect on the direction of Cosmos Group i.e., Cosmos Group and Finance Of go up and down completely randomly.

Pair Corralation between Cosmos Group and Finance Of

Given the investment horizon of 90 days Cosmos Group Holdings is expected to generate 26.09 times more return on investment than Finance Of. However, Cosmos Group is 26.09 times more volatile than Finance of America. It trades about 0.19 of its potential returns per unit of risk. Finance of America is currently generating about 0.2 per unit of risk. If you would invest  0.01  in Cosmos Group Holdings on September 12, 2024 and sell it today you would lose (0.01) from holding Cosmos Group Holdings or give up 100.0% of portfolio value over 90 days.

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

Cosmos Group Holdings  vs.  Finance of America

Cosmos Group Holdings

Risk-Adjusted Performance

14 of 100

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.

Finance of America

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Finance of America are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Finance Of sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cosmos Group and Finance Of

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

The idea behind Cosmos Group Holdings and Finance of America 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.