Correlation Between Japan Asia and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Cogent Communications Holdings, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Cogent Communications.
Diversification Opportunities for Japan Asia and Cogent Communications
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and Cogent is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Cogent Communications go up and down completely randomly.
Pair Corralation between Japan Asia and Cogent Communications
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the Cogent Communications. But the stock apears to be less risky and, when comparing its historical volatility, Japan Asia Investment is 1.06 times less risky than Cogent Communications. The stock trades about -0.12 of its potential returns per unit of risk. The Cogent Communications Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,200 in Cogent Communications Holdings on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Cogent Communications Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Cogent Communications Holdings
Performance |
| Timeline |
| Japan Asia Investment |
| Cogent Communications |
Japan Asia and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Cogent Communications
The main advantage of trading using opposite Japan Asia and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. BOS BETTER ONLINE | Japan Asia vs. CARSALESCOM | Japan Asia vs. MUTUIONLINE | Japan Asia vs. NEWELL RUBBERMAID |
| Cogent Communications vs. NTT DATA | Cogent Communications vs. TERADATA | Cogent Communications vs. Alliance Data Systems | Cogent Communications vs. MICRONIC MYDATA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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