Correlation Between Cosmos and COCOS BCX

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

Diversification Opportunities for Cosmos and COCOS BCX

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Cosmos and COCOS is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos and COCOS BCX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCOS BCX and Cosmos 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 are associated (or correlated) with COCOS BCX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCOS BCX has no effect on the direction of Cosmos i.e., Cosmos and COCOS BCX go up and down completely randomly.

Pair Corralation between Cosmos and COCOS BCX

Assuming the 90 days trading horizon Cosmos is expected to under-perform the COCOS BCX. But the crypto coin apears to be less risky and, when comparing its historical volatility, Cosmos is 55.58 times less risky than COCOS BCX. The crypto coin trades about -0.06 of its potential returns per unit of risk. The COCOS BCX is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  0.06  in COCOS BCX on February 21, 2022 and sell it today you would earn a total of  99.94  from holding COCOS BCX or generate 158378.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy92.21%
ValuesDaily Returns

Cosmos  vs.  COCOS BCX

 Performance (%) 
      Timeline 
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

COCOS BCX 
COCOS Performance
33 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in COCOS BCX are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, COCOS BCX sustained solid returns over the last few months and may actually be approaching a breakup point.

COCOS Price Channel

Cosmos and COCOS BCX Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Cosmos and COCOS BCX

The main advantage of trading using opposite Cosmos and COCOS BCX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos position performs unexpectedly, COCOS BCX 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 COCOS BCX will offset losses from the drop in COCOS BCX's long position.
The idea behind Cosmos and COCOS BCX 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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