Correlation Between Cogent Communications and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Anhui Conch 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 Anhui Conch 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 Anhui Conch Cement, you can compare the effects of market volatilities on Cogent Communications and Anhui Conch 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 Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Anhui Conch.
Diversification Opportunities for Cogent Communications and Anhui Conch
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cogent and Anhui is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement 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 Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Cogent Communications i.e., Cogent Communications and Anhui Conch go up and down completely randomly.
Pair Corralation between Cogent Communications and Anhui Conch
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 0.58 times more return on investment than Anhui Conch. However, Cogent Communications Holdings is 1.73 times less risky than Anhui Conch. It trades about 0.2 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about -0.04 per unit of risk. If you would invest 7,100 in Cogent Communications Holdings on November 27, 2024 and sell it today you would earn a total of 550.00 from holding Cogent Communications Holdings or generate 7.75% 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. Anhui Conch Cement
Performance |
| Timeline |
| Cogent Communications |
| Anhui Conch Cement |
Cogent Communications and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Anhui Conch
The main advantage of trading using opposite Cogent Communications and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Anhui Conch 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 Anhui Conch will offset losses from the drop in Anhui Conch's long position.| Cogent Communications vs. PARKEN Sport Entertainment | Cogent Communications vs. Universal Entertainment | Cogent Communications vs. CNVISION MEDIA | Cogent Communications vs. SQUIRREL MEDIA SA |
| Anhui Conch vs. Arrow Electronics | Anhui Conch vs. ATRESMEDIA | Anhui Conch vs. ProSiebenSat1 Media SE | Anhui Conch vs. Prosiebensat 1 Media |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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