Correlation Between Burlington Stores and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Burlington Stores 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 Burlington Stores and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Cogent Communications Holdings, you can compare the effects of market volatilities on Burlington Stores 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 Burlington Stores with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Cogent Communications.
Diversification Opportunities for Burlington Stores and Cogent Communications
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Burlington and Cogent is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Burlington Stores 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 Burlington Stores 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 Burlington Stores i.e., Burlington Stores and Cogent Communications go up and down completely randomly.
Pair Corralation between Burlington Stores and Cogent Communications
Assuming the 90 days horizon Burlington Stores is expected to generate 1.23 times less return on investment than Cogent Communications. In addition to that, Burlington Stores is 1.14 times more volatile than Cogent Communications Holdings. It trades about 0.04 of its total potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.05 per unit of volatility. If you would invest 5,205 in Cogent Communications Holdings on September 3, 2024 and sell it today you would earn a total of 2,495 from holding Cogent Communications Holdings or generate 47.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Cogent Communications Holdings
Performance |
| Timeline |
| Burlington Stores |
| Cogent Communications |
Burlington Stores and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Cogent Communications
The main advantage of trading using opposite Burlington Stores and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores 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.| Burlington Stores vs. Walmart | Burlington Stores vs. Superior Plus Corp | Burlington Stores vs. NMI Holdings | Burlington Stores vs. Origin Agritech |
| Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. ATT Inc | Cogent Communications vs. Nippon Telegraph and |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |