Correlation Between Cogent Biosciences and IMedia Brands
Can any of the company-specific risk be diversified away by investing in both Cogent Biosciences and IMedia Brands 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 Biosciences and IMedia Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogent Biosciences and IMedia Brands, you can compare the effects of market volatilities on Cogent Biosciences and IMedia Brands 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 Biosciences with a short position of IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Biosciences and IMedia Brands.
Diversification Opportunities for Cogent Biosciences and IMedia Brands
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogent and IMedia is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Biosciences and IMedia Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands and Cogent Biosciences 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 Biosciences are associated (or correlated) with IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands has no effect on the direction of Cogent Biosciences i.e., Cogent Biosciences and IMedia Brands go up and down completely randomly.
Pair Corralation between Cogent Biosciences and IMedia Brands
Given the investment horizon of 90 days Cogent Biosciences is expected to generate 0.42 times more return on investment than IMedia Brands. However, Cogent Biosciences is 2.36 times less risky than IMedia Brands. It trades about 0.01 of its potential returns per unit of risk. IMedia Brands is currently generating about -0.11 per unit of risk. If you would invest 1,150 in Cogent Biosciences on September 19, 2024 and sell it today you would lose (386.00) from holding Cogent Biosciences or give up 33.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.43% |
| Values | Daily Returns |
Cogent Biosciences vs. IMedia Brands
Performance |
| Timeline |
| Cogent Biosciences |
| IMedia Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cogent Biosciences and IMedia Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Biosciences and IMedia Brands
The main advantage of trading using opposite Cogent Biosciences and IMedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Biosciences position performs unexpectedly, IMedia Brands 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 IMedia Brands will offset losses from the drop in IMedia Brands' long position.| Cogent Biosciences vs. Larimar Therapeutics | Cogent Biosciences vs. Kura Oncology | Cogent Biosciences vs. Kiniksa Pharmaceuticals | Cogent Biosciences vs. Ideaya Biosciences |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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