Correlation Between Goodfood Market and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both Goodfood Market and Cogeco 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 Goodfood Market and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfood Market Corp and Cogeco Communications, you can compare the effects of market volatilities on Goodfood Market and Cogeco 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 Goodfood Market with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and Cogeco Communications.
Diversification Opportunities for Goodfood Market and Cogeco Communications
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goodfood and Cogeco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of Goodfood Market i.e., Goodfood Market and Cogeco Communications go up and down completely randomly.
Pair Corralation between Goodfood Market and Cogeco Communications
Assuming the 90 days trading horizon Goodfood Market Corp is expected to generate 3.66 times more return on investment than Cogeco Communications. However, Goodfood Market is 3.66 times more volatile than Cogeco Communications. It trades about 0.07 of its potential returns per unit of risk. Cogeco Communications is currently generating about 0.04 per unit of risk. If you would invest 38.00 in Goodfood Market Corp on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Goodfood Market Corp or generate 5.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Goodfood Market Corp vs. Cogeco Communications
Performance |
Timeline |
Goodfood Market Corp |
Cogeco Communications |
Goodfood Market and Cogeco Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goodfood Market and Cogeco Communications
The main advantage of trading using opposite Goodfood Market and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfood Market position performs unexpectedly, Cogeco 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 Cogeco Communications will offset losses from the drop in Cogeco Communications' long position.Goodfood Market vs. WELL Health Technologies | Goodfood Market vs. Lightspeed Commerce | Goodfood Market vs. iShares Canadian HYBrid | Goodfood Market vs. Altagas Cum Red |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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