Correlation Between Cogent Communications and Altice USA
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Altice USA 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 Cogent Communications and Altice USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogent Communications Group and Altice USA, you can compare the effects of market volatilities on Cogent Communications and Altice USA 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 Cogent Communications with a short position of Altice USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Altice USA.
Diversification Opportunities for Cogent Communications and Altice USA
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cogent and Altice is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Group and Altice USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice USA and Cogent 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 Cogent Communications Group are associated (or correlated) with Altice USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice USA has no effect on the direction of Cogent Communications i.e., Cogent Communications and Altice USA go up and down completely randomly.
Pair Corralation between Cogent Communications and Altice USA
Given the investment horizon of 90 days Cogent Communications Group is expected to generate 0.37 times more return on investment than Altice USA. However, Cogent Communications Group is 2.68 times less risky than Altice USA. It trades about 0.45 of its potential returns per unit of risk. Altice USA is currently generating about 0.05 per unit of risk. If you would invest 7,260 in Cogent Communications Group on November 18, 2024 and sell it today you would earn a total of 940.00 from holding Cogent Communications Group or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Group vs. Altice USA
Performance |
| Timeline |
| Cogent Communications |
| Altice USA |
Cogent Communications and Altice USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Altice USA
The main advantage of trading using opposite Cogent Communications and Altice USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Altice USA 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 Altice USA will offset losses from the drop in Altice USA's long position.| Cogent Communications vs. Liberty Broadband Srs | Cogent Communications vs. Charter Communications | Cogent Communications vs. Liberty Broadband Srs | Cogent Communications vs. TIM Participacoes SA |
| Altice USA vs. Liberty Broadband Srs | Altice USA vs. Cogent Communications Group | Altice USA vs. Charter Communications | Altice USA vs. Liberty Broadband Srs |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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