Correlation Between COSMO FIRST and Nucleus Software

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

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

Diversification Opportunities for COSMO FIRST and Nucleus Software

0.77

Correlation Coefficient

COSMO FIRST  Nucleus Software

Poor diversification

The 3 months correlation between COSMO and Nucleus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding COSMO FIRST LIMITED and Nucleus Software Exports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucleus Software Exports and COSMO FIRST 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 COSMO FIRST LIMITED are associated (or correlated) with Nucleus Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucleus Software Exports has no effect on the direction of COSMO FIRST i.e., COSMO FIRST and Nucleus Software go up and down completely randomly.

Pair Corralation between COSMO FIRST and Nucleus Software

Assuming the 90 days trading horizon COSMO FIRST LIMITED is expected to generate 1.23 times more return on investment than Nucleus Software. However, COSMO FIRST is 1.23 times more volatile than Nucleus Software Exports. It trades about 0.24 of its potential returns per unit of risk. Nucleus Software Exports is currently generating about 0.09 per unit of risk. If you would invest  60,150  in COSMO FIRST LIMITED on April 22, 2025 and sell it today you would earn a total of  53,550  from holding COSMO FIRST LIMITED or generate 89.03% return on investment over 90 days.

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

COSMO FIRST LIMITED  vs.  Nucleus Software Exports

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 19 (%) 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.

Nucleus Software Exports

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nucleus Software Exports are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Nucleus Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSMO FIRST and Nucleus Software

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

The idea behind COSMO FIRST LIMITED and Nucleus Software Exports 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.