Correlation Between Cogent Communications and ATT
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Cogent Communications and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and ATT.
Diversification Opportunities for Cogent Communications and ATT
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogent and ATT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Group and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Cogent Communications i.e., Cogent Communications and ATT go up and down completely randomly.
Pair Corralation between Cogent Communications and ATT
Given the investment horizon of 90 days Cogent Communications Group is expected to generate 1.31 times more return on investment than ATT. However, Cogent Communications is 1.31 times more volatile than ATT Inc. It trades about 0.06 of its potential returns per unit of risk. ATT Inc is currently generating about 0.05 per unit of risk. If you would invest 5,223 in Cogent Communications Group on August 25, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Group vs. ATT Inc
Performance |
| Timeline |
| Cogent Communications |
| ATT Inc |
Cogent Communications and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and ATT
The main advantage of trading using opposite Cogent Communications and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT'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 |
| ATT vs. Consolidated Communications | ATT vs. Cogent Communications Group | ATT vs. Liberty Broadband Srs | ATT vs. Ribbon Communications |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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