Correlation Between Cogent Communications and Sify Technologies
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Sify Technologies 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 Sify Technologies 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 Sify Technologies Limited, you can compare the effects of market volatilities on Cogent Communications and Sify Technologies 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 Sify Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Sify Technologies.
Diversification Opportunities for Cogent Communications and Sify Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogent and Sify is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Group and Sify Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sify Technologies 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 Sify Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sify Technologies has no effect on the direction of Cogent Communications i.e., Cogent Communications and Sify Technologies go up and down completely randomly.
Pair Corralation between Cogent Communications and Sify Technologies
Given the investment horizon of 90 days Cogent Communications Group is expected to generate 0.3 times more return on investment than Sify Technologies. However, Cogent Communications Group is 3.28 times less risky than Sify Technologies. It trades about 0.06 of its potential returns per unit of risk. Sify Technologies Limited is currently generating about -0.02 per unit of risk. If you would invest 8,229 in Cogent Communications Group on August 24, 2024 and sell it today you would earn a total of 150.00 from holding Cogent Communications Group or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Group vs. Sify Technologies Limited
Performance |
| Timeline |
| Cogent Communications |
| Sify Technologies |
Cogent Communications and Sify Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Sify Technologies
The main advantage of trading using opposite Cogent Communications and Sify Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Sify Technologies 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 Sify Technologies will offset losses from the drop in Sify Technologies' 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 |
| Sify Technologies vs. KORE Group Holdings | Sify Technologies vs. Consolidated Communications | Sify Technologies vs. Cogent Communications Group | Sify Technologies 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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