Correlation Between Alpha Finance and Cosmos

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Alpha Finance 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 Alpha Finance and Cosmos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Finance Lab and Cosmos, you can compare the effects of market volatilities on Alpha Finance 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 Alpha Finance with a short position of Cosmos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Finance and Cosmos.

Diversification Opportunities for Alpha Finance and Cosmos

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Alpha and Cosmos is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Finance Lab and Cosmos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos and Alpha Finance 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 Alpha Finance Lab 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 Alpha Finance i.e., Alpha Finance and Cosmos go up and down completely randomly.

Pair Corralation between Alpha Finance and Cosmos

Assuming the 90 days trading horizon Alpha Finance Lab is expected to under-perform the Cosmos. But the crypto coin apears to be less risky and, when comparing its historical volatility, Alpha Finance Lab is 1.0 times less risky than Cosmos. The crypto coin trades about -0.13 of its potential returns per unit of risk. The Cosmos is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,431  in Cosmos on February 22, 2022 and sell it today you would lose (2,328)  from holding Cosmos or give up 67.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Alpha Finance Lab  vs.  Cosmos

 Performance (%) 
      Timeline 
Alpha Finance Lab 
Alpha Performance
0 of 100
Over the last 90 days Alpha Finance Lab has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's technical indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for Alpha Finance Lab investors.

Alpha Price Channel

Cosmos 
Cosmos Performance
0 of 100
Over the last 90 days Cosmos has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for Cosmos investors.

Cosmos Price Channel

Alpha Finance and Cosmos Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alpha Finance and Cosmos

The main advantage of trading using opposite Alpha Finance and Cosmos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Finance 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 Alpha Finance Lab 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go