Correlation Between Cosmos Health and Digital Brands

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

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

Diversification Opportunities for Cosmos Health and Digital Brands

0.0

Correlation Coefficient

Cosmos Health  Digital Brands

Pay attention - limited upside

The 3 months correlation between Cosmos and Digital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Health and Digital Brands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Brands Group and Cosmos Health 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 Cosmos Health are associated (or correlated) with Digital Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Brands Group has no effect on the direction of Cosmos Health i.e., Cosmos Health and Digital Brands go up and down completely randomly.

Pair Corralation between Cosmos Health and Digital Brands

If you would invest  42.00  in Cosmos Health on April 25, 2025 and sell it today you would earn a total of  12.99  from holding Cosmos Health or generate 30.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cosmos Health  vs.  Digital Brands Group

Cosmos Health

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Health are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cosmos Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Digital Brands Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digital Brands Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Digital Brands is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cosmos Health and Digital Brands

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

The idea behind Cosmos Health and Digital Brands Group 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.