Correlation Between Cogent Communications and FingerMotion
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and FingerMotion 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 FingerMotion 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 FingerMotion, you can compare the effects of market volatilities on Cogent Communications and FingerMotion 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 FingerMotion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and FingerMotion.
Diversification Opportunities for Cogent Communications and FingerMotion
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and FingerMotion is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Group and FingerMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FingerMotion 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 FingerMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FingerMotion has no effect on the direction of Cogent Communications i.e., Cogent Communications and FingerMotion go up and down completely randomly.
Pair Corralation between Cogent Communications and FingerMotion
Given the investment horizon of 90 days Cogent Communications Group is expected to generate 0.28 times more return on investment than FingerMotion. However, Cogent Communications Group is 3.6 times less risky than FingerMotion. It trades about 0.06 of its potential returns per unit of risk. FingerMotion is currently generating about 0.01 per unit of risk. If you would invest 5,223 in Cogent Communications Group on August 26, 2024 and sell it today you would earn a total of 3,093 from holding Cogent Communications Group or generate 59.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Group vs. FingerMotion
Performance |
| Timeline |
| Cogent Communications |
| FingerMotion |
Cogent Communications and FingerMotion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and FingerMotion
The main advantage of trading using opposite Cogent Communications and FingerMotion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, FingerMotion 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 FingerMotion will offset losses from the drop in FingerMotion'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 |
| FingerMotion vs. Cogent Communications Group | FingerMotion vs. Liberty Broadband Srs | FingerMotion vs. Ribbon Communications | FingerMotion 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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