Correlation Between Cosmos and Hive

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

By analyzing existing cross correlation between Cosmos and Hive, you can compare the effects of market volatilities on Cosmos and Hive 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 Hive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos and Hive.

Diversification Opportunities for Cosmos and Hive

0.9

Correlation Coefficient

Cosmos  Hive

Almost no diversification

The 3 months correlation between Cosmos and Hive is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos and Hive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hive 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 Hive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hive has no effect on the direction of Cosmos i.e., Cosmos and Hive go up and down completely randomly.

Pair Corralation between Cosmos and Hive

Assuming the 90 days trading horizon Cosmos is expected to generate 1.08 times more return on investment than Hive. However, Cosmos is 1.08 times more volatile than Hive. It trades about 0.06 of its potential returns per unit of risk. Hive is currently generating about 0.02 per unit of risk. If you would invest  663.00  in Cosmos on January 18, 2024 and sell it today you would earn a total of  151.00  from holding Cosmos or generate 22.78% return on investment over 90 days.

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

Cosmos  vs.  Hive

Cosmos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cosmos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cosmos shareholders.

Hive

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hive are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hive is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cosmos and Hive

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

The idea behind Cosmos and Hive 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.