Correlation Between Commonwealth Bank and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank 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 Commonwealth Bank and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Cogent Communications Holdings, you can compare the effects of market volatilities on Commonwealth Bank 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 Commonwealth Bank with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Cogent Communications.
Diversification Opportunities for Commonwealth Bank and Cogent Communications
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commonwealth and Cogent is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Commonwealth Bank 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 Commonwealth Bank of 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 Commonwealth Bank i.e., Commonwealth Bank and Cogent Communications go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Cogent Communications
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.61 times more return on investment than Cogent Communications. However, Commonwealth Bank of is 1.64 times less risky than Cogent Communications. It trades about 0.16 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.06 per unit of risk. If you would invest 5,702 in Commonwealth Bank of on September 1, 2024 and sell it today you would earn a total of 4,104 from holding Commonwealth Bank of or generate 71.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Cogent Communications Holdings
Performance |
| Timeline |
| Commonwealth Bank |
| Cogent Communications |
Commonwealth Bank and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Cogent Communications
The main advantage of trading using opposite Commonwealth Bank and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank 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.| Commonwealth Bank vs. Playtech plc | Commonwealth Bank vs. CANON MARKETING JP | Commonwealth Bank vs. Carsales | Commonwealth Bank vs. Lion Biotechnologies |
| Cogent Communications vs. Perma Fix Environmental Services | Cogent Communications vs. Nippon Steel | Cogent Communications vs. Insteel Industries | Cogent Communications vs. Caltagirone SpA |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |