Correlation Between Cogent Communications and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and ADRIATIC METALS 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Cogent Communications and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and ADRIATIC METALS.
Diversification Opportunities for Cogent Communications and ADRIATIC METALS
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cogent and ADRIATIC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Cogent Communications i.e., Cogent Communications and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between Cogent Communications and ADRIATIC METALS
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 0.64 times more return on investment than ADRIATIC METALS. However, Cogent Communications Holdings is 1.56 times less risky than ADRIATIC METALS. It trades about 0.06 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.03 per unit of risk. If you would invest 4,587 in Cogent Communications Holdings on September 4, 2024 and sell it today you would earn a total of 3,113 from holding Cogent Communications Holdings or generate 67.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| Cogent Communications |
| ADRIATIC METALS LS |
Cogent Communications and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and ADRIATIC METALS
The main advantage of trading using opposite Cogent Communications and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| Cogent Communications vs. RCM TECHNOLOGIES | Cogent Communications vs. Ultra Clean Holdings | Cogent Communications vs. Cleanaway Waste Management | Cogent Communications vs. Amkor Technology |
| ADRIATIC METALS vs. Mineral Resources Limited | ADRIATIC METALS vs. Liontown Resources Limited | ADRIATIC METALS vs. American Lithium Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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