Correlation Between Cogent Communications and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Haverty Furniture 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 Cogent Communications and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogent Communications Holdings and Haverty Furniture Companies, you can compare the effects of market volatilities on Cogent Communications and Haverty Furniture 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 Cogent Communications with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Haverty Furniture.
Diversification Opportunities for Cogent Communications and Haverty Furniture
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and Haverty is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and Cogent Communications 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 Cogent Communications Holdings are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of Cogent Communications i.e., Cogent Communications and Haverty Furniture go up and down completely randomly.
Pair Corralation between Cogent Communications and Haverty Furniture
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the Haverty Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Communications Holdings is 1.59 times less risky than Haverty Furniture. The stock trades about -0.25 of its potential returns per unit of risk. The Haverty Furniture Companies is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,089 in Haverty Furniture Companies on September 22, 2024 and sell it today you would lose (9.00) from holding Haverty Furniture Companies or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. Haverty Furniture Companies
Performance |
| Timeline |
| Cogent Communications |
| Haverty Furniture |
Cogent Communications and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Haverty Furniture
The main advantage of trading using opposite Cogent Communications and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| Cogent Communications vs. Superior Plus Corp | Cogent Communications vs. SIVERS SEMICONDUCTORS AB | Cogent Communications vs. Norsk Hydro ASA | Cogent Communications vs. Reliance Steel Aluminum |
| Haverty Furniture vs. Lowes Companies | Haverty Furniture vs. Wesfarmers Limited | Haverty Furniture vs. Kingfisher plc | Haverty Furniture vs. Fiskars Oyj Abp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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