Correlation Between FingerMotion and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both FingerMotion 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 FingerMotion and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FingerMotion and Cogent Communications Group, you can compare the effects of market volatilities on FingerMotion 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 FingerMotion with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FingerMotion and Cogent Communications.
Diversification Opportunities for FingerMotion and Cogent Communications
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FingerMotion and Cogent is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding FingerMotion and Cogent Communications Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and FingerMotion 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 FingerMotion 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 FingerMotion i.e., FingerMotion and Cogent Communications go up and down completely randomly.
Pair Corralation between FingerMotion and Cogent Communications
Given the investment horizon of 90 days FingerMotion is expected to generate 1.15 times less return on investment than Cogent Communications. In addition to that, FingerMotion is 3.6 times more volatile than Cogent Communications Group. It trades about 0.01 of its total potential returns per unit of risk. Cogent Communications Group is currently generating about 0.06 per unit of volatility. If you would invest 5,223 in Cogent Communications Group on August 26, 2024 and sell it today you would earn a total of 3,093 from holding Cogent Communications Group or generate 59.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FingerMotion vs. Cogent Communications Group
Performance |
| Timeline |
| FingerMotion |
| Cogent Communications |
FingerMotion and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FingerMotion and Cogent Communications
The main advantage of trading using opposite FingerMotion and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FingerMotion 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.| FingerMotion vs. Cogent Communications Group | FingerMotion vs. Liberty Broadband Srs | FingerMotion vs. Ribbon Communications | FingerMotion vs. Liberty Broadband Srs |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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