Correlation Between Cogeco Communications and Computer Modelling
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Computer Modelling 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 Computer Modelling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Computer Modelling Group, you can compare the effects of market volatilities on Cogeco Communications and Computer Modelling 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 Computer Modelling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Computer Modelling.
Diversification Opportunities for Cogeco Communications and Computer Modelling
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogeco and Computer is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling 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 Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Computer Modelling go up and down completely randomly.
Pair Corralation between Cogeco Communications and Computer Modelling
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 14.23 times less return on investment than Computer Modelling. But when comparing it to its historical volatility, Cogeco Communications is 1.53 times less risky than Computer Modelling. It trades about 0.01 of its potential returns per unit of risk. Computer Modelling Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 557.00 in Computer Modelling Group on August 30, 2024 and sell it today you would earn a total of 478.00 from holding Computer Modelling Group or generate 85.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. Computer Modelling Group
Performance |
| Timeline |
| Cogeco Communications |
| Computer Modelling |
Cogeco Communications and Computer Modelling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Computer Modelling
The main advantage of trading using opposite Cogeco Communications and Computer Modelling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Computer Modelling 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 Computer Modelling will offset losses from the drop in Computer Modelling's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
| Computer Modelling vs. Pason Systems | Computer Modelling vs. Evertz Technologies Limited | Computer Modelling vs. Descartes Systems Group | Computer Modelling vs. Enerflex |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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