Correlation Between NURAN WIRELESS and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both NURAN WIRELESS 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 NURAN WIRELESS and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NURAN WIRELESS INC and Cogent Communications Holdings, you can compare the effects of market volatilities on NURAN WIRELESS 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 NURAN WIRELESS with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of NURAN WIRELESS and Cogent Communications.
Diversification Opportunities for NURAN WIRELESS and Cogent Communications
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NURAN and Cogent is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding NURAN WIRELESS INC and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and NURAN WIRELESS 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 NURAN WIRELESS INC 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 NURAN WIRELESS i.e., NURAN WIRELESS and Cogent Communications go up and down completely randomly.
Pair Corralation between NURAN WIRELESS and Cogent Communications
Assuming the 90 days trading horizon NURAN WIRELESS INC is expected to under-perform the Cogent Communications. In addition to that, NURAN WIRELESS is 1.63 times more volatile than Cogent Communications Holdings. It trades about -0.1 of its total potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.15 per unit of volatility. If you would invest 7,209 in Cogent Communications Holdings on September 1, 2024 and sell it today you would earn a total of 491.00 from holding Cogent Communications Holdings or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NURAN WIRELESS INC vs. Cogent Communications Holdings
Performance |
| Timeline |
| NURAN WIRELESS INC |
| Cogent Communications |
NURAN WIRELESS and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NURAN WIRELESS and Cogent Communications
The main advantage of trading using opposite NURAN WIRELESS and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NURAN WIRELESS 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.| NURAN WIRELESS vs. Motorola Solutions | NURAN WIRELESS vs. Nokia | NURAN WIRELESS vs. ZTE Corporation | NURAN WIRELESS vs. Hewlett Packard Enterprise |
| Cogent Communications vs. Perma Fix Environmental Services | Cogent Communications vs. Nippon Steel | Cogent Communications vs. Insteel Industries | Cogent Communications vs. Caltagirone SpA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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