Correlation Between Hanison Construction and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Hanison Construction 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 Hanison Construction and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanison Construction Holdings and Cogent Communications Holdings, you can compare the effects of market volatilities on Hanison Construction 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 Hanison Construction with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanison Construction and Cogent Communications.
Diversification Opportunities for Hanison Construction and Cogent Communications
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanison and Cogent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Hanison Construction 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 Hanison Construction Holdings 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 Hanison Construction i.e., Hanison Construction and Cogent Communications go up and down completely randomly.
Pair Corralation between Hanison Construction and Cogent Communications
Assuming the 90 days trading horizon Hanison Construction Holdings is expected to generate 1.14 times more return on investment than Cogent Communications. However, Hanison Construction is 1.14 times more volatile than Cogent Communications Holdings. It trades about 0.05 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.03 per unit of risk. If you would invest 8.53 in Hanison Construction Holdings on October 23, 2024 and sell it today you would earn a total of 5.47 from holding Hanison Construction Holdings or generate 64.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanison Construction Holdings vs. Cogent Communications Holdings
Performance |
| Timeline |
| Hanison Construction |
| Cogent Communications |
Hanison Construction and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanison Construction and Cogent Communications
The main advantage of trading using opposite Hanison Construction and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction 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.| Hanison Construction vs. The Hanover Insurance | Hanison Construction vs. GALENA MINING LTD | Hanison Construction vs. LIFENET INSURANCE CO | Hanison Construction vs. Singapore Reinsurance |
| Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. Verizon Communications | Cogent Communications vs. ATT Inc |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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