Correlation Between Cogent Communications and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on Cogent Communications and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and COLUMBIA SPORTSWEAR.
Diversification Opportunities for Cogent Communications and COLUMBIA SPORTSWEAR
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cogent and COLUMBIA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLUMBIA SPORTSWEAR has no effect on the direction of Cogent Communications i.e., Cogent Communications and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between Cogent Communications and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 1.24 times more return on investment than COLUMBIA SPORTSWEAR. However, Cogent Communications is 1.24 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.0 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about -0.02 per unit of risk. If you would invest 5,529 in Cogent Communications Holdings on January 17, 2025 and sell it today you would lose (869.00) from holding Cogent Communications Holdings or give up 15.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| Cogent Communications |
| COLUMBIA SPORTSWEAR |
Cogent Communications and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite Cogent Communications and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR will offset losses from the drop in COLUMBIA SPORTSWEAR's long position.| Cogent Communications vs. FUYO GENERAL LEASE | Cogent Communications vs. Air Lease | Cogent Communications vs. BOS BETTER ONLINE | Cogent Communications vs. United Rentals |
| COLUMBIA SPORTSWEAR vs. NAGOYA RAILROAD | COLUMBIA SPORTSWEAR vs. KAUFMAN ET BROAD | COLUMBIA SPORTSWEAR vs. Meiko Electronics Co | COLUMBIA SPORTSWEAR vs. Electronic Arts |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |