Correlation Between Cogeco Communications and NeuPath Health
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and NeuPath Health 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 NeuPath Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and NeuPath Health, you can compare the effects of market volatilities on Cogeco Communications and NeuPath Health 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 NeuPath Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and NeuPath Health.
Diversification Opportunities for Cogeco Communications and NeuPath Health
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cogeco and NeuPath is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and NeuPath Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeuPath Health 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 NeuPath Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeuPath Health has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and NeuPath Health go up and down completely randomly.
Pair Corralation between Cogeco Communications and NeuPath Health
Assuming the 90 days trading horizon Cogeco Communications is expected to under-perform the NeuPath Health. But the stock apears to be less risky and, when comparing its historical volatility, Cogeco Communications is 4.11 times less risky than NeuPath Health. The stock trades about -0.09 of its potential returns per unit of risk. The NeuPath Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 17.00 in NeuPath Health on August 30, 2024 and sell it today you would earn a total of 0.00 from holding NeuPath Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. NeuPath Health
Performance |
| Timeline |
| Cogeco Communications |
| NeuPath Health |
Cogeco Communications and NeuPath Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and NeuPath Health
The main advantage of trading using opposite Cogeco Communications and NeuPath Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, NeuPath Health 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 NeuPath Health will offset losses from the drop in NeuPath Health's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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