Correlation Between Sentage Holdings and Cosmos Group

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

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

Diversification Opportunities for Sentage Holdings and Cosmos Group

0.36

Correlation Coefficient

Sentage Holdings  Cosmos Group

Weak diversification

The 3 months correlation between Sentage and Cosmos is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sentage Holdings and Cosmos Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Group Holdings and Sentage Holdings 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 Sentage Holdings are associated (or correlated) with Cosmos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Group Holdings has no effect on the direction of Sentage Holdings i.e., Sentage Holdings and Cosmos Group go up and down completely randomly.

Pair Corralation between Sentage Holdings and Cosmos Group

Given the investment horizon of 90 days Sentage Holdings is expected to under-perform the Cosmos Group. But the stock apears to be less risky and, when comparing its historical volatility, Sentage Holdings is 60.37 times less risky than Cosmos Group. The stock trades about -0.22 of its potential returns per unit of risk. The Cosmos Group Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Cosmos Group Holdings on February 4, 2024 and sell it today you would earn a total of  0.00  from holding Cosmos Group Holdings or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Sentage Holdings  vs.  Cosmos Group Holdings

Sentage Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sentage Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cosmos Group Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Group Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Cosmos Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sentage Holdings and Cosmos Group

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

The idea behind Sentage Holdings and Cosmos Group Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.