Correlation Between COMBA TELECOM and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Cogent Communications 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 COMBA TELECOM and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Cogent Communications Holdings, you can compare the effects of market volatilities on COMBA TELECOM and Cogent Communications 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 COMBA TELECOM with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Cogent Communications.
Diversification Opportunities for COMBA TELECOM and Cogent Communications
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMBA and Cogent is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and COMBA TELECOM 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 COMBA TELECOM SYST are associated (or correlated) with Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Cogent Communications go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Cogent Communications
Assuming the 90 days trading horizon COMBA TELECOM is expected to generate 2.27 times less return on investment than Cogent Communications. In addition to that, COMBA TELECOM is 1.03 times more volatile than Cogent Communications Holdings. It trades about 0.03 of its total potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.06 per unit of volatility. If you would invest 5,828 in Cogent Communications Holdings on September 2, 2024 and sell it today you would earn a total of 1,872 from holding Cogent Communications Holdings or generate 32.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Cogent Communications Holdings
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Cogent Communications |
COMBA TELECOM and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Cogent Communications
The main advantage of trading using opposite COMBA TELECOM and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, Cogent Communications 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 Cogent Communications will offset losses from the drop in Cogent Communications' long position.| COMBA TELECOM vs. SIVERS SEMICONDUCTORS AB | COMBA TELECOM vs. Darden Restaurants | COMBA TELECOM vs. Reliance Steel Aluminum | COMBA TELECOM vs. Q2M Managementberatung AG |
| Cogent Communications vs. Calibre Mining Corp | Cogent Communications vs. FUYO GENERAL LEASE | Cogent Communications vs. MINCO SILVER | Cogent Communications vs. Apollo Investment Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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