Correlation Between Cogeco Communications and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Diamond Estates 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 Diamond Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Diamond Estates Wines, you can compare the effects of market volatilities on Cogeco Communications and Diamond Estates 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 Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Diamond Estates.
Diversification Opportunities for Cogeco Communications and Diamond Estates
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cogeco and Diamond is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines 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 Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Diamond Estates go up and down completely randomly.
Pair Corralation between Cogeco Communications and Diamond Estates
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.37 times more return on investment than Diamond Estates. However, Cogeco Communications is 2.73 times less risky than Diamond Estates. It trades about -0.07 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about -0.06 per unit of risk. If you would invest 6,863 in Cogeco Communications on September 25, 2024 and sell it today you would lose (212.00) from holding Cogeco Communications or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. Diamond Estates Wines
Performance |
| Timeline |
| Cogeco Communications |
| Diamond Estates Wines |
Cogeco Communications and Diamond Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Diamond Estates
The main advantage of trading using opposite Cogeco Communications and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
| Diamond Estates vs. CI Financial Corp | Diamond Estates vs. Olympia Financial Group | Diamond Estates vs. Financial 15 Split | Diamond Estates vs. Bip Investment Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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