Correlation Between COG Financial and Southern Cross
Can any of the company-specific risk be diversified away by investing in both COG Financial and Southern Cross 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 COG Financial and Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COG Financial Services and Southern Cross Media, you can compare the effects of market volatilities on COG Financial and Southern Cross 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 COG Financial with a short position of Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of COG Financial and Southern Cross.
Diversification Opportunities for COG Financial and Southern Cross
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between COG and Southern is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding COG Financial Services and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media and COG Financial 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 COG Financial Services are associated (or correlated) with Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of COG Financial i.e., COG Financial and Southern Cross go up and down completely randomly.
Pair Corralation between COG Financial and Southern Cross
Assuming the 90 days trading horizon COG Financial Services is expected to under-perform the Southern Cross. But the stock apears to be less risky and, when comparing its historical volatility, COG Financial Services is 1.48 times less risky than Southern Cross. The stock trades about -0.01 of its potential returns per unit of risk. The Southern Cross Media is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Southern Cross Media on October 26, 2024 and sell it today you would earn a total of 11.00 from holding Southern Cross Media or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COG Financial Services vs. Southern Cross Media
Performance |
| Timeline |
| COG Financial Services |
| Southern Cross Media |
COG Financial and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COG Financial and Southern Cross
The main advantage of trading using opposite COG Financial and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COG Financial position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| COG Financial vs. Southern Cross Media | COG Financial vs. Diversified United Investment | COG Financial vs. Hotel Property Investments | COG Financial vs. Mirrabooka Investments |
| Southern Cross vs. Microequities Asset Management | Southern Cross vs. DMC Mining | Southern Cross vs. Actinogen Medical | Southern Cross vs. De Grey Mining |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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