Correlation Between Cogeco Communications and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Capstone Mining 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 Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Capstone Mining Corp, you can compare the effects of market volatilities on Cogeco Communications and Capstone Mining 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 Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Capstone Mining.
Diversification Opportunities for Cogeco Communications and Capstone Mining
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cogeco and Capstone is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp 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 Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Capstone Mining go up and down completely randomly.
Pair Corralation between Cogeco Communications and Capstone Mining
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 3.32 times less return on investment than Capstone Mining. But when comparing it to its historical volatility, Cogeco Communications is 1.97 times less risky than Capstone Mining. It trades about 0.02 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 645.00 in Capstone Mining Corp on October 11, 2024 and sell it today you would earn a total of 278.00 from holding Capstone Mining Corp or generate 43.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. Capstone Mining Corp
Performance |
| Timeline |
| Cogeco Communications |
| Capstone Mining Corp |
Cogeco Communications and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Capstone Mining
The main advantage of trading using opposite Cogeco Communications and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Capstone Mining 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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