Correlation Between Cogent Communications and Japan Medical
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Japan Medical 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 Japan Medical 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 Japan Medical Dynamic, you can compare the effects of market volatilities on Cogent Communications and Japan Medical 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 Japan Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Japan Medical.
Diversification Opportunities for Cogent Communications and Japan Medical
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cogent and Japan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic 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 Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of Cogent Communications i.e., Cogent Communications and Japan Medical go up and down completely randomly.
Pair Corralation between Cogent Communications and Japan Medical
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 1.3 times more return on investment than Japan Medical. However, Cogent Communications is 1.3 times more volatile than Japan Medical Dynamic. It trades about 0.15 of its potential returns per unit of risk. Japan Medical Dynamic is currently generating about 0.02 per unit of risk. If you would invest 5,009 in Cogent Communications Holdings on September 2, 2024 and sell it today you would earn a total of 2,691 from holding Cogent Communications Holdings or generate 53.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. Japan Medical Dynamic
Performance |
| Timeline |
| Cogent Communications |
| Japan Medical Dynamic |
Cogent Communications and Japan Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Japan Medical
The main advantage of trading using opposite Cogent Communications and Japan Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Japan Medical 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 Japan Medical will offset losses from the drop in Japan Medical's long position.| Cogent Communications vs. Calibre Mining Corp | Cogent Communications vs. FUYO GENERAL LEASE | Cogent Communications vs. MINCO SILVER | Cogent Communications vs. Apollo Investment Corp |
| Japan Medical vs. InterContinental Hotels Group | Japan Medical vs. MIRAMAR HOTEL INV | Japan Medical vs. GRIFFIN MINING LTD | Japan Medical vs. Host Hotels Resorts |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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