Correlation Between Superior Plus and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Cogent Communications Holdings, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Cogent Communications.
Diversification Opportunities for Superior Plus and Cogent Communications
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Cogent is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Cogent Communications go up and down completely randomly.
Pair Corralation between Superior Plus and Cogent Communications
Assuming the 90 days horizon Superior Plus is expected to generate 8.64 times less return on investment than Cogent Communications. In addition to that, Superior Plus is 2.17 times more volatile than Cogent Communications Holdings. It trades about 0.01 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 7,357 in Cogent Communications Holdings on August 31, 2024 and sell it today you would earn a total of 443.00 from holding Cogent Communications Holdings or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Cogent Communications Holdings
Performance |
| Timeline |
| Superior Plus Corp |
| Cogent Communications |
Superior Plus and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Cogent Communications
The main advantage of trading using opposite Superior Plus and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. BROADSTNET LEADL 00025 | Superior Plus vs. Mitsubishi Materials | Superior Plus vs. Martin Marietta Materials | Superior Plus vs. Summit Materials |
| Cogent Communications vs. T Mobile | Cogent Communications vs. ATT Inc | Cogent Communications vs. Deutsche Telekom AG | Cogent Communications vs. Superior Plus Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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