Correlation Between Intercontinental and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Intercontinental 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 Intercontinental and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intercontinental Exchange and Cogent Communications Holdings, you can compare the effects of market volatilities on Intercontinental 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 Intercontinental with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercontinental and Cogent Communications.
Diversification Opportunities for Intercontinental and Cogent Communications
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intercontinental and Cogent is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intercontinental Exchange and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Intercontinental 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 Intercontinental Exchange 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 Intercontinental i.e., Intercontinental and Cogent Communications go up and down completely randomly.
Pair Corralation between Intercontinental and Cogent Communications
Assuming the 90 days trading horizon Intercontinental Exchange is expected to generate 0.84 times more return on investment than Cogent Communications. However, Intercontinental Exchange is 1.19 times less risky than Cogent Communications. It trades about 0.03 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.1 per unit of risk. If you would invest 14,450 in Intercontinental Exchange on October 25, 2024 and sell it today you would earn a total of 66.00 from holding Intercontinental Exchange or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Intercontinental Exchange vs. Cogent Communications Holdings
Performance |
| Timeline |
| Intercontinental Exchange |
| Cogent Communications |
Intercontinental and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intercontinental and Cogent Communications
The main advantage of trading using opposite Intercontinental and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercontinental 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.| Intercontinental vs. Gruppo Mutuionline SpA | Intercontinental vs. MTY Food Group | Intercontinental vs. Carsales | Intercontinental vs. Axfood AB |
| Cogent Communications vs. HUTCHISON TELECOMM | Cogent Communications vs. Align Technology | Cogent Communications vs. Chengdu PUTIAN Telecommunications | Cogent Communications vs. CITIC Telecom International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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