Correlation Between Cosmos and VEST

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

Diversification Opportunities for Cosmos and VEST

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Cosmos and VEST is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos and VEST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEST 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 VEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEST has no effect on the direction of Cosmos i.e., Cosmos and VEST go up and down completely randomly.

Pair Corralation between Cosmos and VEST

If you would invest  1,141  in Cosmos on December 29, 2023 and sell it today you would earn a total of  92.00  from holding Cosmos or generate 8.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Cosmos  vs.  VEST

 Performance 
       Timeline  
Cosmos 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cosmos exhibited solid returns over the last few months and may actually be approaching a breakup point.
VEST 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days VEST has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, VEST is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cosmos and VEST Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cosmos and VEST

The main advantage of trading using opposite Cosmos and VEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos position performs unexpectedly, VEST 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 VEST will offset losses from the drop in VEST's long position.
The idea behind Cosmos and VEST 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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