Correlation Between Cogent Communications and TITANIUM TRANSPORTGROUP
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP, you can compare the effects of market volatilities on Cogent Communications and TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and TITANIUM TRANSPORTGROUP.
Diversification Opportunities for Cogent Communications and TITANIUM TRANSPORTGROUP
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cogent and TITANIUM is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and TITANIUM TRANSPORTGROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITANIUM TRANSPORTGROUP has no effect on the direction of Cogent Communications i.e., Cogent Communications and TITANIUM TRANSPORTGROUP go up and down completely randomly.
Pair Corralation between Cogent Communications and TITANIUM TRANSPORTGROUP
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 1.08 times more return on investment than TITANIUM TRANSPORTGROUP. However, Cogent Communications is 1.08 times more volatile than TITANIUM TRANSPORTGROUP. It trades about 0.14 of its potential returns per unit of risk. TITANIUM TRANSPORTGROUP is currently generating about 0.04 per unit of risk. If you would invest 5,252 in Cogent Communications Holdings on September 1, 2024 and sell it today you would earn a total of 2,498 from holding Cogent Communications Holdings or generate 47.56% 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. TITANIUM TRANSPORTGROUP
Performance |
| Timeline |
| Cogent Communications |
| TITANIUM TRANSPORTGROUP |
Cogent Communications and TITANIUM TRANSPORTGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and TITANIUM TRANSPORTGROUP
The main advantage of trading using opposite Cogent Communications and TITANIUM TRANSPORTGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, TITANIUM TRANSPORTGROUP 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 TITANIUM TRANSPORTGROUP will offset losses from the drop in TITANIUM TRANSPORTGROUP's long position.| Cogent Communications vs. Perma Fix Environmental Services | Cogent Communications vs. Nippon Steel | Cogent Communications vs. Insteel Industries | Cogent Communications vs. Caltagirone SpA |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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