Correlation Between Amines Plasticizers and COSMO FIRST

Can any of the company-specific risk be diversified away by investing in both Amines Plasticizers and COSMO FIRST 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 Amines Plasticizers and COSMO FIRST into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amines Plasticizers Limited and COSMO FIRST LIMITED, you can compare the effects of market volatilities on Amines Plasticizers and COSMO FIRST 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 Amines Plasticizers with a short position of COSMO FIRST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amines Plasticizers and COSMO FIRST.

Diversification Opportunities for Amines Plasticizers and COSMO FIRST

0.82

Correlation Coefficient

Amines Plasticizers  COSMO FIRST

Very poor diversification

The 3 months correlation between Amines and COSMO is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amines Plasticizers Limited and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST LIMITED and Amines Plasticizers 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 Amines Plasticizers Limited are associated (or correlated) with COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of Amines Plasticizers i.e., Amines Plasticizers and COSMO FIRST go up and down completely randomly.

Pair Corralation between Amines Plasticizers and COSMO FIRST

Assuming the 90 days trading horizon Amines Plasticizers is expected to generate 9.69 times less return on investment than COSMO FIRST. But when comparing it to its historical volatility, Amines Plasticizers Limited is 1.97 times less risky than COSMO FIRST. It trades about 0.05 of its potential returns per unit of risk. COSMO FIRST LIMITED is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  60,115  in COSMO FIRST LIMITED on April 21, 2025 and sell it today you would earn a total of  53,585  from holding COSMO FIRST LIMITED or generate 89.14% return on investment over 90 days.

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

Amines Plasticizers Limited  vs.  COSMO FIRST LIMITED

Amines Plasticizers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amines Plasticizers Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Amines Plasticizers may actually be approaching a critical reversion point that can send shares even higher in August 2025.

COSMO FIRST LIMITED

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COSMO FIRST LIMITED are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, COSMO FIRST demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amines Plasticizers and COSMO FIRST

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

The idea behind Amines Plasticizers Limited and COSMO FIRST LIMITED 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.