Correlation Between Cogent Communications and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and PPHE HOTEL 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 PPHE HOTEL 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 PPHE HOTEL GROUP, you can compare the effects of market volatilities on Cogent Communications and PPHE HOTEL 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 PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and PPHE HOTEL.
Diversification Opportunities for Cogent Communications and PPHE HOTEL
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and PPHE is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of Cogent Communications i.e., Cogent Communications and PPHE HOTEL go up and down completely randomly.
Pair Corralation between Cogent Communications and PPHE HOTEL
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 1.18 times more return on investment than PPHE HOTEL. However, Cogent Communications is 1.18 times more volatile than PPHE HOTEL GROUP. It trades about 0.03 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.04 per unit of risk. If you would invest 5,469 in Cogent Communications Holdings on October 11, 2024 and sell it today you would earn a total of 1,531 from holding Cogent Communications Holdings or generate 27.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cogent Communications Holdings vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| Cogent Communications |
| PPHE HOTEL GROUP |
Cogent Communications and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and PPHE HOTEL
The main advantage of trading using opposite Cogent Communications and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| Cogent Communications vs. NTT DATA | Cogent Communications vs. TERADATA | Cogent Communications vs. Alliance Data Systems | Cogent Communications vs. MICRONIC MYDATA |
| PPHE HOTEL vs. T MOBILE US | PPHE HOTEL vs. Cogent Communications Holdings | PPHE HOTEL vs. MOBILE FACTORY INC | PPHE HOTEL vs. Air Transport Services |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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