Correlation Between Cogeco Communications and NorthWest Healthcare
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and NorthWest Healthcare 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 NorthWest Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and NorthWest Healthcare Properties, you can compare the effects of market volatilities on Cogeco Communications and NorthWest Healthcare 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 NorthWest Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and NorthWest Healthcare.
Diversification Opportunities for Cogeco Communications and NorthWest Healthcare
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cogeco and NorthWest is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and NorthWest Healthcare Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthWest Healthcare 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 NorthWest Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthWest Healthcare has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and NorthWest Healthcare go up and down completely randomly.
Pair Corralation between Cogeco Communications and NorthWest Healthcare
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.67 times more return on investment than NorthWest Healthcare. However, Cogeco Communications is 1.49 times less risky than NorthWest Healthcare. It trades about 0.03 of its potential returns per unit of risk. NorthWest Healthcare Properties is currently generating about -0.03 per unit of risk. If you would invest 6,060 in Cogeco Communications on August 31, 2024 and sell it today you would earn a total of 940.00 from holding Cogeco Communications or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. NorthWest Healthcare Propertie
Performance |
| Timeline |
| Cogeco Communications |
| NorthWest Healthcare |
Cogeco Communications and NorthWest Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and NorthWest Healthcare
The main advantage of trading using opposite Cogeco Communications and NorthWest Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, NorthWest Healthcare 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 NorthWest Healthcare will offset losses from the drop in NorthWest Healthcare'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 |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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