Correlation Between Cogeco and Canadian General
Can any of the company-specific risk be diversified away by investing in both Cogeco and Canadian General 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 and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogeco Inc and Canadian General Investments, you can compare the effects of market volatilities on Cogeco and Canadian General 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 with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco and Canadian General.
Diversification Opportunities for Cogeco and Canadian General
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cogeco and Canadian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Inc and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Cogeco 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 Inc are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Cogeco i.e., Cogeco and Canadian General go up and down completely randomly.
Pair Corralation between Cogeco and Canadian General
Assuming the 90 days trading horizon Cogeco is expected to generate 1.86 times less return on investment than Canadian General. In addition to that, Cogeco is 1.23 times more volatile than Canadian General Investments. It trades about 0.04 of its total potential returns per unit of risk. Canadian General Investments is currently generating about 0.1 per unit of volatility. If you would invest 4,025 in Canadian General Investments on August 28, 2024 and sell it today you would earn a total of 75.00 from holding Canadian General Investments or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Inc vs. Canadian General Investments
Performance |
| Timeline |
| Cogeco Inc |
| Canadian General Inv |
Cogeco and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco and Canadian General
The main advantage of trading using opposite Cogeco and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Cogeco vs. Cogeco Communications | Cogeco vs. Quebecor | Cogeco vs. Transcontinental | Cogeco vs. Stella Jones |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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