Correlation Between Cogent Communications and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and ONWARD MEDICAL 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV, you can compare the effects of market volatilities on Cogent Communications and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and ONWARD MEDICAL.
Diversification Opportunities for Cogent Communications and ONWARD MEDICAL
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cogent and ONWARD is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Cogent Communications i.e., Cogent Communications and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between Cogent Communications and ONWARD MEDICAL
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the ONWARD MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Communications Holdings is 1.44 times less risky than ONWARD MEDICAL. The stock trades about -0.19 of its potential returns per unit of risk. The ONWARD MEDICAL BV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 447.00 in ONWARD MEDICAL BV on September 24, 2024 and sell it today you would earn a total of 27.00 from holding ONWARD MEDICAL BV or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| Cogent Communications |
| ONWARD MEDICAL BV |
Cogent Communications and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and ONWARD MEDICAL
The main advantage of trading using opposite Cogent Communications and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. Verizon Communications | Cogent Communications vs. ATT Inc |
| ONWARD MEDICAL vs. Cogent Communications Holdings | ONWARD MEDICAL vs. Ribbon Communications | ONWARD MEDICAL vs. Perdoceo Education | ONWARD MEDICAL vs. Spirent Communications plc |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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