Correlation Between OFFICIAL TRUMP and Cosmos

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

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

Diversification Opportunities for OFFICIAL TRUMP and Cosmos

0.74

Correlation Coefficient

OFFICIAL TRUMP  Cosmos

Poor diversification

The 3 months correlation between OFFICIAL and Cosmos is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding OFFICIAL TRUMP and Cosmos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos and OFFICIAL TRUMP 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 OFFICIAL TRUMP are associated (or correlated) with Cosmos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos has no effect on the direction of OFFICIAL TRUMP i.e., OFFICIAL TRUMP and Cosmos go up and down completely randomly.

Pair Corralation between OFFICIAL TRUMP and Cosmos

Assuming the 90 days trading horizon OFFICIAL TRUMP is expected to generate 2.18 times more return on investment than Cosmos. However, OFFICIAL TRUMP is 2.18 times more volatile than Cosmos. It trades about 0.05 of its potential returns per unit of risk. Cosmos is currently generating about 0.08 per unit of risk. If you would invest  922.00  in OFFICIAL TRUMP on April 20, 2025 and sell it today you would earn a total of  78.00  from holding OFFICIAL TRUMP or generate 8.46% return on investment over 90 days.

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

OFFICIAL TRUMP  vs.  Cosmos

OFFICIAL TRUMP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OFFICIAL TRUMP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, OFFICIAL TRUMP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cosmos

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Cosmos exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OFFICIAL TRUMP and Cosmos

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

The idea behind OFFICIAL TRUMP and Cosmos 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.