Correlation Between CREO MEDICAL and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both CREO MEDICAL 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 CREO MEDICAL and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREO MEDICAL GRP and Cogent Communications Holdings, you can compare the effects of market volatilities on CREO MEDICAL 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 CREO MEDICAL with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREO MEDICAL and Cogent Communications.
Diversification Opportunities for CREO MEDICAL and Cogent Communications
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREO and Cogent is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CREO MEDICAL GRP and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and CREO MEDICAL 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 CREO MEDICAL GRP 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 CREO MEDICAL i.e., CREO MEDICAL and Cogent Communications go up and down completely randomly.
Pair Corralation between CREO MEDICAL and Cogent Communications
Assuming the 90 days horizon CREO MEDICAL GRP is expected to generate 3.19 times more return on investment than Cogent Communications. However, CREO MEDICAL is 3.19 times more volatile than Cogent Communications Holdings. It trades about 0.33 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.01 per unit of risk. If you would invest 16.00 in CREO MEDICAL GRP on October 10, 2024 and sell it today you would earn a total of 6.00 from holding CREO MEDICAL GRP or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREO MEDICAL GRP vs. Cogent Communications Holdings
Performance |
| Timeline |
| CREO MEDICAL GRP |
| Cogent Communications |
CREO MEDICAL and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREO MEDICAL and Cogent Communications
The main advantage of trading using opposite CREO MEDICAL and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREO MEDICAL 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.| CREO MEDICAL vs. Pentair plc | CREO MEDICAL vs. SBM OFFSHORE | CREO MEDICAL vs. WT OFFSHORE | CREO MEDICAL vs. SIEM OFFSHORE NEW |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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