Correlation Between Cogent Communications and 24SEVENOFFICE GROUP
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB, you can compare the effects of market volatilities on Cogent Communications and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and 24SEVENOFFICE GROUP.
Diversification Opportunities for Cogent Communications and 24SEVENOFFICE GROUP
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogent and 24SEVENOFFICE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and 24SEVENOFFICE GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SEVENOFFICE 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 24SEVENOFFICE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SEVENOFFICE GROUP has no effect on the direction of Cogent Communications i.e., Cogent Communications and 24SEVENOFFICE GROUP go up and down completely randomly.
Pair Corralation between Cogent Communications and 24SEVENOFFICE GROUP
Assuming the 90 days trading horizon Cogent Communications is expected to generate 1.08 times less return on investment than 24SEVENOFFICE GROUP. But when comparing it to its historical volatility, Cogent Communications Holdings is 1.95 times less risky than 24SEVENOFFICE GROUP. It trades about 0.13 of its potential returns per unit of risk. 24SEVENOFFICE GROUP AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 172.00 in 24SEVENOFFICE GROUP AB on September 12, 2024 and sell it today you would earn a total of 25.00 from holding 24SEVENOFFICE GROUP AB or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. 24SEVENOFFICE GROUP AB
Performance |
| Timeline |
| Cogent Communications |
| 24SEVENOFFICE GROUP |
Cogent Communications and 24SEVENOFFICE GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and 24SEVENOFFICE GROUP
The main advantage of trading using opposite Cogent Communications and 24SEVENOFFICE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP will offset losses from the drop in 24SEVENOFFICE GROUP'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 |
| 24SEVENOFFICE GROUP vs. Salesforce | 24SEVENOFFICE GROUP vs. Superior Plus Corp | 24SEVENOFFICE GROUP vs. SIVERS SEMICONDUCTORS AB | 24SEVENOFFICE GROUP vs. Norsk Hydro ASA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |