Correlation Between National Bank and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Cogeco Communications, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Cogeco Communications.
Diversification Opportunities for National Bank and Cogeco Communications
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Cogeco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and National Bank 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 National Bank of 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 National Bank i.e., National Bank and Cogeco Communications go up and down completely randomly.
Pair Corralation between National Bank and Cogeco Communications
Assuming the 90 days trading horizon National Bank of is expected to generate 0.21 times more return on investment than Cogeco Communications. However, National Bank of is 4.72 times less risky than Cogeco Communications. It trades about -0.09 of its potential returns per unit of risk. Cogeco Communications is currently generating about -0.18 per unit of risk. If you would invest 2,509 in National Bank of on October 21, 2024 and sell it today you would lose (17.00) from holding National Bank of or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Cogeco Communications
Performance |
| Timeline |
| National Bank |
| Cogeco Communications |
National Bank and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Cogeco Communications
The main advantage of trading using opposite National Bank and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. Mako Mining Corp | National Bank vs. Guru Organic Energy | National Bank vs. Marimaca Copper Corp | National Bank vs. Maple Leaf Foods |
| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |