Correlation Between FUTURE GAMING and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING 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 FUTURE GAMING and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUTURE GAMING GRP and Cogent Communications Holdings, you can compare the effects of market volatilities on FUTURE GAMING 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 FUTURE GAMING with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and Cogent Communications.
Diversification Opportunities for FUTURE GAMING and Cogent Communications
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUTURE and Cogent is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING 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 FUTURE GAMING 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 FUTURE GAMING 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 FUTURE GAMING i.e., FUTURE GAMING and Cogent Communications go up and down completely randomly.
Pair Corralation between FUTURE GAMING and Cogent Communications
Assuming the 90 days trading horizon FUTURE GAMING GRP is expected to under-perform the Cogent Communications. In addition to that, FUTURE GAMING is 1.75 times more volatile than Cogent Communications Holdings. It trades about -0.06 of its total potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.13 per unit of volatility. If you would invest 6,172 in Cogent Communications Holdings on September 12, 2024 and sell it today you would earn a total of 1,028 from holding Cogent Communications Holdings or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. Cogent Communications Holdings
Performance |
| Timeline |
| FUTURE GAMING GRP |
| Cogent Communications |
FUTURE GAMING and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and Cogent Communications
The main advantage of trading using opposite FUTURE GAMING and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING 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.| FUTURE GAMING vs. Scientific Games | FUTURE GAMING vs. International Game Technology | FUTURE GAMING vs. Superior Plus Corp | FUTURE GAMING vs. SIVERS SEMICONDUCTORS AB |
| Cogent Communications vs. Superior Plus Corp | Cogent Communications vs. SIVERS SEMICONDUCTORS AB | Cogent Communications vs. Norsk Hydro ASA | Cogent Communications vs. Reliance Steel Aluminum |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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