Correlation Between Cogent Communications and EHEALTH
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and EHEALTH 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 EHEALTH 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 EHEALTH, you can compare the effects of market volatilities on Cogent Communications and EHEALTH 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 EHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and EHEALTH.
Diversification Opportunities for Cogent Communications and EHEALTH
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cogent and EHEALTH is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and EHEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHEALTH 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 EHEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHEALTH has no effect on the direction of Cogent Communications i.e., Cogent Communications and EHEALTH go up and down completely randomly.
Pair Corralation between Cogent Communications and EHEALTH
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the EHEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Communications Holdings is 2.61 times less risky than EHEALTH. The stock trades about -0.1 of its potential returns per unit of risk. The EHEALTH is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 763.00 in EHEALTH on October 20, 2024 and sell it today you would earn a total of 181.00 from holding EHEALTH or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. EHEALTH
Performance |
| Timeline |
| Cogent Communications |
| EHEALTH |
Cogent Communications and EHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and EHEALTH
The main advantage of trading using opposite Cogent Communications and EHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, EHEALTH 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 EHEALTH will offset losses from the drop in EHEALTH's long position.| Cogent Communications vs. INDOFOOD AGRI RES | Cogent Communications vs. Comba Telecom Systems | Cogent Communications vs. SK TELECOM TDADR | Cogent Communications vs. TYSON FOODS A |
| EHEALTH vs. Nippon Light Metal | EHEALTH vs. GWILLI FOOD | EHEALTH vs. Austevoll Seafood ASA | EHEALTH vs. ADRIATIC METALS LS 013355 |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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