Correlation Between Mask Investments and COSMO FIRST

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

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

Diversification Opportunities for Mask Investments and COSMO FIRST

-0.21

Correlation Coefficient

Mask Investments  COSMO FIRST

Very good diversification

The 3 months correlation between Mask and COSMO is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mask Investments 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 Mask Investments 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 Mask Investments 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 Mask Investments i.e., Mask Investments and COSMO FIRST go up and down completely randomly.

Pair Corralation between Mask Investments and COSMO FIRST

Assuming the 90 days trading horizon Mask Investments is expected to generate 31.96 times less return on investment than COSMO FIRST. But when comparing it to its historical volatility, Mask Investments Limited is 1.38 times less risky than COSMO FIRST. It trades about 0.01 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 20, 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 Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Mask Investments Limited  vs.  COSMO FIRST LIMITED

Mask Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mask Investments Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Mask Investments is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 weak basic indicators, COSMO FIRST demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mask Investments and COSMO FIRST

The main advantage of trading using opposite Mask Investments and COSMO FIRST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mask Investments 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 Mask Investments 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.