Correlation Between Cogeco Communications and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and CCL Industries 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 Cogeco Communications and CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and CCL Industries, you can compare the effects of market volatilities on Cogeco Communications and CCL Industries 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 Cogeco Communications with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and CCL Industries.
Diversification Opportunities for Cogeco Communications and CCL Industries
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogeco and CCL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries and Cogeco Communications 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 Cogeco Communications are associated (or correlated) with CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and CCL Industries go up and down completely randomly.
Pair Corralation between Cogeco Communications and CCL Industries
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.65 times more return on investment than CCL Industries. However, Cogeco Communications is 1.53 times less risky than CCL Industries. It trades about -0.07 of its potential returns per unit of risk. CCL Industries is currently generating about -0.28 per unit of risk. If you would invest 6,965 in Cogeco Communications on August 28, 2024 and sell it today you would lose (102.00) from holding Cogeco Communications or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. CCL Industries
Performance |
| Timeline |
| Cogeco Communications |
| CCL Industries |
Cogeco Communications and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and CCL Industries
The main advantage of trading using opposite Cogeco Communications and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Cogeco Communications vs. Alphabet Inc CDR | Cogeco Communications vs. Microsoft Corp CDR | Cogeco Communications vs. NVIDIA CDR | Cogeco Communications vs. Tesla Inc CDR |
| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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