Correlation Between Cogeco Communications and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Canadian Utilities 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 Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Canadian Utilities Ltd, you can compare the effects of market volatilities on Cogeco Communications and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Canadian Utilities.
Diversification Opportunities for Cogeco Communications and Canadian Utilities
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cogeco and Canadian is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Canadian Utilities go up and down completely randomly.
Pair Corralation between Cogeco Communications and Canadian Utilities
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 12.12 times less return on investment than Canadian Utilities. In addition to that, Cogeco Communications is 4.32 times more volatile than Canadian Utilities Ltd. It trades about 0.0 of its total potential returns per unit of risk. Canadian Utilities Ltd is currently generating about 0.19 per unit of volatility. If you would invest 2,435 in Canadian Utilities Ltd on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Canadian Utilities Ltd or generate 1.64% 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. Canadian Utilities Ltd
Performance |
| Timeline |
| Cogeco Communications |
| Canadian Utilities |
Cogeco Communications and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Canadian Utilities
The main advantage of trading using opposite Cogeco Communications and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
| Canadian Utilities vs. Microsoft Corp CDR | Canadian Utilities vs. Apple Inc CDR | Canadian Utilities vs. Alphabet Inc CDR | Canadian Utilities vs. Amazon CDR |
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.
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