Correlation Between Cogent Communications and G III
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on Cogent Communications and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and G III.
Diversification Opportunities for Cogent Communications and G III
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogent and GI4 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Cogent Communications i.e., Cogent Communications and G III go up and down completely randomly.
Pair Corralation between Cogent Communications and G III
Assuming the 90 days trading horizon Cogent Communications is expected to generate 1.31 times less return on investment than G III. In addition to that, Cogent Communications is 1.06 times more volatile than G III Apparel Group. It trades about 0.13 of its total potential returns per unit of risk. G III Apparel Group is currently generating about 0.17 per unit of volatility. If you would invest 2,740 in G III Apparel Group on September 5, 2024 and sell it today you would earn a total of 240.00 from holding G III Apparel Group or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cogent Communications Holdings vs. G III Apparel Group
Performance |
| Timeline |
| Cogent Communications |
| G III Apparel |
Cogent Communications and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and G III
The main advantage of trading using opposite Cogent Communications and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Cogent Communications vs. RCM TECHNOLOGIES | Cogent Communications vs. Mitsui Chemicals | Cogent Communications vs. NetSol Technologies | Cogent Communications 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |