Correlation Between Pyth Network and Cosmos

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

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

Diversification Opportunities for Pyth Network and Cosmos

0.78

Correlation Coefficient

Pyth Network  Cosmos

Poor diversification

The 3 months correlation between Pyth and Cosmos is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pyth Network and Cosmos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos and Pyth Network 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 Pyth Network 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 Pyth Network i.e., Pyth Network and Cosmos go up and down completely randomly.

Pair Corralation between Pyth Network and Cosmos

Assuming the 90 days trading horizon Pyth Network is expected to generate 5.71 times less return on investment than Cosmos. In addition to that, Pyth Network is 1.88 times more volatile than Cosmos. It trades about 0.0 of its total potential returns per unit of risk. Cosmos is currently generating about 0.05 per unit of volatility. If you would invest  438.00  in Cosmos on April 28, 2025 and sell it today you would earn a total of  40.00  from holding Cosmos or generate 9.13% return on investment over 90 days.

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

Pyth Network  vs.  Cosmos

Pyth Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pyth Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Pyth Network is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cosmos

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos are ranked lower than 4 (%) 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 Pyth Network and Cosmos

The main advantage of trading using opposite Pyth Network and Cosmos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyth Network 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 Pyth Network 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.

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.