Correlation Between Cogeco Communications and Highway 50
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Highway 50 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 Highway 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Highway 50 Gold, you can compare the effects of market volatilities on Cogeco Communications and Highway 50 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 Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Highway 50.
Diversification Opportunities for Cogeco Communications and Highway 50
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogeco and Highway is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold 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 Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Highway 50 go up and down completely randomly.
Pair Corralation between Cogeco Communications and Highway 50
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.2 times more return on investment than Highway 50. However, Cogeco Communications is 4.99 times less risky than Highway 50. It trades about 0.14 of its potential returns per unit of risk. Highway 50 Gold is currently generating about -0.23 per unit of risk. If you would invest 6,903 in Cogeco Communications on September 5, 2024 and sell it today you would earn a total of 306.00 from holding Cogeco Communications or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cogeco Communications vs. Highway 50 Gold
Performance |
| Timeline |
| Cogeco Communications |
| Highway 50 Gold |
Cogeco Communications and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Highway 50
The main advantage of trading using opposite Cogeco Communications and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50's long position.| Cogeco Communications vs. GreenPower Motor | Cogeco Communications vs. Royal Helium | Cogeco Communications vs. Excelsior Mining Corp | Cogeco Communications vs. Vista Gold |
| Highway 50 vs. Maple Peak Investments | Highway 50 vs. 2028 Investment Grade | Highway 50 vs. Cogeco Communications | Highway 50 vs. Economic Investment Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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