Correlation Between Helvetia Holding and COSMO Pharmaceuticals

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

Diversification Opportunities for Helvetia Holding and COSMO Pharmaceuticals

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Helvetia and COSMO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and COSMO Pharmaceuticals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO Pharmaceuticals and Helvetia Holding 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 Helvetia Holding AG are associated (or correlated) with COSMO Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO Pharmaceuticals has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and COSMO Pharmaceuticals go up and down completely randomly.

Pair Corralation between Helvetia Holding and COSMO Pharmaceuticals

Assuming the 90 days trading horizon Helvetia Holding is expected to generate 2.95 times less return on investment than COSMO Pharmaceuticals. But when comparing it to its historical volatility, Helvetia Holding AG is 2.71 times less risky than COSMO Pharmaceuticals. It trades about 0.2 of its potential returns per unit of risk. COSMO Pharmaceuticals SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  4,566  in COSMO Pharmaceuticals SA on April 24, 2025 and sell it today you would earn a total of  1,704  from holding COSMO Pharmaceuticals SA or generate 37.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Helvetia Holding AG  vs.  COSMO Pharmaceuticals SA

 Performance 
       Timeline  
Helvetia Holding 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.
COSMO Pharmaceuticals 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in COSMO Pharmaceuticals SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, COSMO Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Helvetia Holding and COSMO Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Helvetia Holding and COSMO Pharmaceuticals

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

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