Correlation Between CENNZ and Cosmos
Can any of the company-specific risk be diversified away by investing in both CENNZ and Cosmos 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 CENNZ and Cosmos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENNZ and Cosmos, you can compare the effects of market volatilities on CENNZ and Cosmos 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 CENNZ with a short position of Cosmos. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENNZ and Cosmos.
Diversification Opportunities for CENNZ and Cosmos
Average diversification
The 3 months correlation between CENNZ and Cosmos is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CENNZ and Cosmos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos and CENNZ 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 CENNZ are associated (or correlated) with Cosmos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos has no effect on the direction of CENNZ i.e., CENNZ and Cosmos go up and down completely randomly.
Pair Corralation between CENNZ and Cosmos
Assuming the 90 days trading horizon CENNZ is expected to generate 12.05 times more return on investment than Cosmos. However, CENNZ is 12.05 times more volatile than Cosmos. It trades about 0.17 of its potential returns per unit of risk. Cosmos is currently generating about -0.35 per unit of risk. If you would invest 4.33 in CENNZ on January 26, 2024 and sell it today you would earn a total of 4.06 from holding CENNZ or generate 93.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENNZ vs. Cosmos
Performance |
| Timeline |
| CENNZ |
| Cosmos |
CENNZ and Cosmos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENNZ and Cosmos
The main advantage of trading using opposite CENNZ and Cosmos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENNZ position performs unexpectedly, Cosmos 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 will offset losses from the drop in Cosmos' long position.The idea behind CENNZ and Cosmos 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |