Correlation Between Scottish Mortgage and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage 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 Scottish Mortgage and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Cogent Communications Holdings, you can compare the effects of market volatilities on Scottish Mortgage 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 Scottish Mortgage with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Cogent Communications.
Diversification Opportunities for Scottish Mortgage and Cogent Communications
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scottish and Cogent is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Scottish Mortgage 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 Scottish Mortgage Investment 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 Scottish Mortgage i.e., Scottish Mortgage and Cogent Communications go up and down completely randomly.
Pair Corralation between Scottish Mortgage and Cogent Communications
Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.53 times more return on investment than Cogent Communications. However, Scottish Mortgage Investment is 1.89 times less risky than Cogent Communications. It trades about 0.11 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.08 per unit of risk. If you would invest 1,177 in Scottish Mortgage Investment on October 11, 2024 and sell it today you would earn a total of 20.00 from holding Scottish Mortgage Investment or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. Cogent Communications Holdings
Performance |
| Timeline |
| Scottish Mortgage |
| Cogent Communications |
Scottish Mortgage and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and Cogent Communications
The main advantage of trading using opposite Scottish Mortgage and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage 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.| Scottish Mortgage vs. Cogent Communications Holdings | Scottish Mortgage vs. CRISPR Therapeutics AG | Scottish Mortgage vs. INTERCONT HOTELS | Scottish Mortgage vs. Rocket Internet SE |
| Cogent Communications vs. NTT DATA | Cogent Communications vs. TERADATA | Cogent Communications vs. Alliance Data Systems | Cogent Communications vs. MICRONIC MYDATA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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