Correlation Between Cosmos Group and Nelnet

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

Diversification Opportunities for Cosmos Group and Nelnet

0.34

Correlation Coefficient

Cosmos Group  Nelnet

Weak diversification

The 3 months correlation between Cosmos and Nelnet is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Group Holdings and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc 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 Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of Cosmos Group i.e., Cosmos Group and Nelnet go up and down completely randomly.

Pair Corralation between Cosmos Group and Nelnet

Given the investment horizon of 90 days Cosmos Group Holdings is expected to under-perform the Nelnet. In addition to that, Cosmos Group is 8.08 times more volatile than Nelnet Inc. It trades about -0.21 of its total potential returns per unit of risk. Nelnet Inc is currently generating about -0.07 per unit of volatility. If you would invest  11,459  in Nelnet Inc on September 5, 2024 and sell it today you would lose (546.00) from holding Nelnet Inc or give up 4.76% of portfolio value over 90 days.

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

Cosmos Group Holdings  vs.  Nelnet Inc

Cosmos Group Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Group Holdings are ranked lower than 17 (%) 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.

Nelnet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nelnet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nelnet is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cosmos Group and Nelnet

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

The idea behind Cosmos Group Holdings and Nelnet Inc 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.