Correlation Between Cogeco Communications and Winpak
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Winpak 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 Winpak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Communications and Winpak, you can compare the effects of market volatilities on Cogeco Communications and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Winpak.
Diversification Opportunities for Cogeco Communications and Winpak
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogeco and Winpak is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Winpak go up and down completely randomly.
Pair Corralation between Cogeco Communications and Winpak
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 0.96 times more return on investment than Winpak. However, Cogeco Communications is 1.04 times less risky than Winpak. It trades about -0.19 of its potential returns per unit of risk. Winpak is currently generating about -0.2 per unit of risk. If you would invest 6,651 in Cogeco Communications on October 22, 2024 and sell it today you would lose (463.00) from holding Cogeco Communications or give up 6.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. Winpak
Performance |
| Timeline |
| Cogeco Communications |
| Winpak |
Cogeco Communications and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Winpak
The main advantage of trading using opposite Cogeco Communications and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
| Winpak vs. SalesforceCom CDR | Winpak vs. Upstart Investments | Winpak vs. Constellation Software | Winpak vs. Solid Impact Investments |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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