Correlation Between PT Bank and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and Cogent Communications Holdings, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Cogent Communications.
Diversification Opportunities for PT Bank and Cogent Communications
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOZA and Cogent is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and PT Bank 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 PT Bank Maybank 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 PT Bank i.e., PT Bank and Cogent Communications go up and down completely randomly.
Pair Corralation between PT Bank and Cogent Communications
Assuming the 90 days trading horizon PT Bank is expected to generate 1.92 times less return on investment than Cogent Communications. In addition to that, PT Bank is 2.43 times more volatile than Cogent Communications Holdings. It trades about 0.03 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 5,009 in Cogent Communications Holdings on September 2, 2024 and sell it today you would earn a total of 2,691 from holding Cogent Communications Holdings or generate 53.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Maybank vs. Cogent Communications Holdings
Performance |
| Timeline |
| PT Bank Maybank |
| Cogent Communications |
PT Bank and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Cogent Communications
The main advantage of trading using opposite PT Bank and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.The idea behind PT Bank Maybank and Cogent Communications Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cogent Communications vs. Calibre Mining Corp | Cogent Communications vs. FUYO GENERAL LEASE | Cogent Communications vs. MINCO SILVER | Cogent Communications vs. Apollo Investment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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