Correlation Between Cogent Communications and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Fifth Third 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 Fifth Third 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 Fifth Third Bancorp, you can compare the effects of market volatilities on Cogent Communications and Fifth Third 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 Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Fifth Third.
Diversification Opportunities for Cogent Communications and Fifth Third
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogent and Fifth is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp 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 Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Cogent Communications i.e., Cogent Communications and Fifth Third go up and down completely randomly.
Pair Corralation between Cogent Communications and Fifth Third
Assuming the 90 days trading horizon Cogent Communications is expected to generate 1.92 times less return on investment than Fifth Third. In addition to that, Cogent Communications is 1.13 times more volatile than Fifth Third Bancorp. It trades about 0.04 of its total potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.09 per unit of volatility. If you would invest 2,234 in Fifth Third Bancorp on October 12, 2024 and sell it today you would earn a total of 1,875 from holding Fifth Third Bancorp or generate 83.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. Fifth Third Bancorp
Performance |
| Timeline |
| Cogent Communications |
| Fifth Third Bancorp |
Cogent Communications and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Fifth Third
The main advantage of trading using opposite Cogent Communications and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third's long position.| Cogent Communications vs. GEAR4MUSIC LS 10 | Cogent Communications vs. MOVIE GAMES SA | Cogent Communications vs. TELECOM ITALIA | Cogent Communications vs. Constellation Software |
| Fifth Third vs. Charter Communications | Fifth Third vs. Cogent Communications Holdings | Fifth Third vs. alstria office REIT AG | Fifth Third vs. INTERNET INJPADR 1 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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