Correlation Between Cogeco Communications and New Found
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and New Found 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 New Found into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and New Found Gold, you can compare the effects of market volatilities on Cogeco Communications and New Found 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 New Found. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and New Found.
Diversification Opportunities for Cogeco Communications and New Found
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogeco and New is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and New Found Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Found 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 New Found. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Found Gold has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and New Found go up and down completely randomly.
Pair Corralation between Cogeco Communications and New Found
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.28 times more return on investment than New Found. However, Cogeco Communications is 3.54 times less risky than New Found. It trades about 0.09 of its potential returns per unit of risk. New Found Gold is currently generating about -0.15 per unit of risk. If you would invest 6,835 in Cogeco Communications on September 2, 2024 and sell it today you would earn a total of 165.00 from holding Cogeco Communications or generate 2.41% 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. New Found Gold
Performance |
| Timeline |
| Cogeco Communications |
| New Found Gold |
Cogeco Communications and New Found Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and New Found
The main advantage of trading using opposite Cogeco Communications and New Found positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, New Found 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 New Found will offset losses from the drop in New Found's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
| New Found vs. Mako Mining Corp | New Found vs. First National Financial | New Found vs. Altair Resources | New Found vs. Definity Financial 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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