Correlation Between Economic Investment and Cogeco
Can any of the company-specific risk be diversified away by investing in both Economic Investment and Cogeco 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 Economic Investment and Cogeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and Cogeco Inc, you can compare the effects of market volatilities on Economic Investment and Cogeco 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 Economic Investment with a short position of Cogeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Cogeco.
Diversification Opportunities for Economic Investment and Cogeco
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Economic and Cogeco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust and Cogeco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Inc and Economic Investment 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 Economic Investment Trust are associated (or correlated) with Cogeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Inc has no effect on the direction of Economic Investment i.e., Economic Investment and Cogeco go up and down completely randomly.
Pair Corralation between Economic Investment and Cogeco
Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 0.41 times more return on investment than Cogeco. However, Economic Investment Trust is 2.44 times less risky than Cogeco. It trades about 0.33 of its potential returns per unit of risk. Cogeco Inc is currently generating about 0.1 per unit of risk. If you would invest 16,826 in Economic Investment Trust on September 1, 2024 and sell it today you would earn a total of 624.00 from holding Economic Investment Trust or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Economic Investment Trust vs. Cogeco Inc
Performance |
| Timeline |
| Economic Investment Trust |
| Cogeco Inc |
Economic Investment and Cogeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and Cogeco
The main advantage of trading using opposite Economic Investment and Cogeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment position performs unexpectedly, Cogeco 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 Cogeco will offset losses from the drop in Cogeco's long position.| Economic Investment vs. Enbridge Pref 5 | Economic Investment vs. Enbridge Pref 11 | Economic Investment vs. Enbridge Pref L | Economic Investment vs. E Split Corp |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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