Correlation Between INTEL CDR and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both INTEL CDR 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 INTEL CDR and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTEL CDR and Cogeco Communications, you can compare the effects of market volatilities on INTEL CDR 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 INTEL CDR with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTEL CDR and Cogeco Communications.
Diversification Opportunities for INTEL CDR and Cogeco Communications
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTEL and Cogeco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and INTEL CDR 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 INTEL CDR 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 INTEL CDR i.e., INTEL CDR and Cogeco Communications go up and down completely randomly.
Pair Corralation between INTEL CDR and Cogeco Communications
Assuming the 90 days trading horizon INTEL CDR is expected to generate 3.78 times more return on investment than Cogeco Communications. However, INTEL CDR is 3.78 times more volatile than Cogeco Communications. It trades about 0.13 of its potential returns per unit of risk. Cogeco Communications is currently generating about -0.07 per unit of risk. If you would invest 1,346 in INTEL CDR on August 28, 2024 and sell it today you would earn a total of 116.00 from holding INTEL CDR or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTEL CDR vs. Cogeco Communications
Performance |
| Timeline |
| INTEL CDR |
| Cogeco Communications |
INTEL CDR and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTEL CDR and Cogeco Communications
The main advantage of trading using opposite INTEL CDR and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTEL CDR 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.| INTEL CDR vs. Postmedia Network Canada | INTEL CDR vs. DRI Healthcare Trust | INTEL CDR vs. Reliq Health Technologies | INTEL CDR vs. TGS Esports |
| Cogeco Communications vs. Alphabet Inc CDR | Cogeco Communications vs. Microsoft Corp CDR | Cogeco Communications vs. NVIDIA CDR | Cogeco Communications vs. Tesla Inc CDR |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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