Correlation Between Cogent Communications and Lion One
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Cogent Communications and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Lion One.
Diversification Opportunities for Cogent Communications and Lion One
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cogent and Lion is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Cogent Communications i.e., Cogent Communications and Lion One go up and down completely randomly.
Pair Corralation between Cogent Communications and Lion One
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 0.57 times more return on investment than Lion One. However, Cogent Communications Holdings is 1.75 times less risky than Lion One. It trades about 0.1 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.1 per unit of risk. If you would invest 7,357 in Cogent Communications Holdings on September 2, 2024 and sell it today you would earn a total of 343.00 from holding Cogent Communications Holdings or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. Lion One Metals
Performance |
| Timeline |
| Cogent Communications |
| Lion One Metals |
Cogent Communications and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Lion One
The main advantage of trading using opposite Cogent Communications and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One'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 |
| Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings | Lion One vs. Origin Agritech |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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