Correlation Between FleetPartners and COG Financial
Can any of the company-specific risk be diversified away by investing in both FleetPartners and COG Financial 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 FleetPartners and COG Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FleetPartners Group and COG Financial Services, you can compare the effects of market volatilities on FleetPartners and COG Financial 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 FleetPartners with a short position of COG Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FleetPartners and COG Financial.
Diversification Opportunities for FleetPartners and COG Financial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FleetPartners and COG is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding FleetPartners Group and COG Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COG Financial Services and FleetPartners 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 FleetPartners Group are associated (or correlated) with COG Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COG Financial Services has no effect on the direction of FleetPartners i.e., FleetPartners and COG Financial go up and down completely randomly.
Pair Corralation between FleetPartners and COG Financial
Assuming the 90 days trading horizon FleetPartners is expected to generate 1.09 times less return on investment than COG Financial. But when comparing it to its historical volatility, FleetPartners Group is 1.19 times less risky than COG Financial. It trades about 0.18 of its potential returns per unit of risk. COG Financial Services is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 92.00 in COG Financial Services on October 25, 2024 and sell it today you would earn a total of 7.00 from holding COG Financial Services or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FleetPartners Group vs. COG Financial Services
Performance |
| Timeline |
| FleetPartners Group |
| COG Financial Services |
FleetPartners and COG Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FleetPartners and COG Financial
The main advantage of trading using opposite FleetPartners and COG Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FleetPartners position performs unexpectedly, COG Financial 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 COG Financial will offset losses from the drop in COG Financial's long position.| FleetPartners vs. Mach7 Technologies | FleetPartners vs. Macquarie Technology Group | FleetPartners vs. Dug Technology | FleetPartners vs. Thorney Technologies |
| COG Financial vs. FireFly Metals | COG Financial vs. Aurelia Metals | COG Financial vs. Dexus Convenience Retail | COG Financial vs. Torque Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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