Correlation Between American Hotel and Cogeco
Can any of the company-specific risk be diversified away by investing in both American Hotel 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 American Hotel and Cogeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Cogeco Inc, you can compare the effects of market volatilities on American Hotel 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 American Hotel with a short position of Cogeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Cogeco.
Diversification Opportunities for American Hotel and Cogeco
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Cogeco is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Cogeco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Inc and American Hotel 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 American Hotel Income 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 American Hotel i.e., American Hotel and Cogeco go up and down completely randomly.
Pair Corralation between American Hotel and Cogeco
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Cogeco. In addition to that, American Hotel is 3.41 times more volatile than Cogeco Inc. It trades about -0.02 of its total potential returns per unit of risk. Cogeco Inc is currently generating about 0.01 per unit of volatility. If you would invest 5,411 in Cogeco Inc on November 2, 2024 and sell it today you would lose (108.00) from holding Cogeco Inc or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.91% |
| Values | Daily Returns |
American Hotel Income vs. Cogeco Inc
Performance |
| Timeline |
| American Hotel Income |
| Cogeco Inc |
American Hotel and Cogeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Cogeco
The main advantage of trading using opposite American Hotel and Cogeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel 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.| American Hotel vs. Dream Office Real | American Hotel vs. Brookfield Office Properties | American Hotel vs. Mako Mining Corp | American Hotel vs. Calibre Mining Corp |
| Cogeco vs. Cogeco Communications | Cogeco vs. Quebecor | Cogeco vs. Transcontinental | Cogeco vs. Stella Jones |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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