Correlation Between Corporate Travel and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and Cogent Communications 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 Corporate Travel and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and Cogent Communications Holdings, you can compare the effects of market volatilities on Corporate Travel and Cogent Communications 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 Corporate Travel with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and Cogent Communications.
Diversification Opportunities for Corporate Travel and Cogent Communications
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporate and Cogent is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of Corporate Travel i.e., Corporate Travel and Cogent Communications go up and down completely randomly.
Pair Corralation between Corporate Travel and Cogent Communications
Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 1.31 times more return on investment than Cogent Communications. However, Corporate Travel is 1.31 times more volatile than Cogent Communications Holdings. It trades about 0.31 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.14 per unit of risk. If you would invest 700.00 in Corporate Travel Management on August 28, 2024 and sell it today you would earn a total of 145.00 from holding Corporate Travel Management or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. Cogent Communications Holdings
Performance |
| Timeline |
| Corporate Travel Man |
| Cogent Communications |
Corporate Travel and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and Cogent Communications
The main advantage of trading using opposite Corporate Travel and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, Cogent Communications 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 Cogent Communications will offset losses from the drop in Cogent Communications' long position.| Corporate Travel vs. Penta Ocean Construction Co | Corporate Travel vs. Daito Trust Construction | Corporate Travel vs. Sterling Construction | Corporate Travel vs. WIMFARM SA EO |
| Cogent Communications vs. T Mobile | Cogent Communications vs. ATT Inc | Cogent Communications vs. Deutsche Telekom AG |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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