Correlation Between Cogeco Communications and CGI
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and CGI 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 CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and CGI Inc, you can compare the effects of market volatilities on Cogeco Communications and CGI 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 CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and CGI.
Diversification Opportunities for Cogeco Communications and CGI
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogeco and CGI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc 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 CGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGI Inc has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and CGI go up and down completely randomly.
Pair Corralation between Cogeco Communications and CGI
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.89 times more return on investment than CGI. However, Cogeco Communications is 1.12 times less risky than CGI. It trades about 0.35 of its potential returns per unit of risk. CGI Inc is currently generating about 0.0 per unit of risk. If you would invest 6,048 in Cogeco Communications on November 28, 2024 and sell it today you would earn a total of 651.00 from holding Cogeco Communications or generate 10.76% 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. CGI Inc
Performance |
| Timeline |
| Cogeco Communications |
| CGI Inc |
Cogeco Communications and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and CGI
The main advantage of trading using opposite Cogeco Communications and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, CGI 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 CGI will offset losses from the drop in CGI's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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