Correlation Between Cogeco Communications and US Financial
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and US Financial 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 US Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and US Financial 15, you can compare the effects of market volatilities on Cogeco Communications and US Financial 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 US Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and US Financial.
Diversification Opportunities for Cogeco Communications and US Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogeco and FTU-PB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and US Financial 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Financial 15 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 US Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Financial 15 has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and US Financial go up and down completely randomly.
Pair Corralation between Cogeco Communications and US Financial
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.93 times more return on investment than US Financial. However, Cogeco Communications is 1.08 times less risky than US Financial. It trades about 0.17 of its potential returns per unit of risk. US Financial 15 is currently generating about 0.11 per unit of risk. If you would invest 5,213 in Cogeco Communications on August 31, 2024 and sell it today you would earn a total of 1,787 from holding Cogeco Communications or generate 34.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cogeco Communications vs. US Financial 15
Performance |
| Timeline |
| Cogeco Communications |
| US Financial 15 |
Cogeco Communications and US Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and US Financial
The main advantage of trading using opposite Cogeco Communications and US Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, US Financial 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 US Financial will offset losses from the drop in US Financial's long position.| Cogeco Communications vs. Cielo Waste Solutions | Cogeco Communications vs. Eros Resources Corp | Cogeco Communications vs. Forstrong Global Income | Cogeco Communications vs. iShares Canadian HYBrid |
| US Financial vs. North American Financial | US Financial vs. Prime Dividend Corp | US Financial vs. Canadian Life Companies | US Financial vs. Financial 15 Split |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |