Correlation Between Cogent Communications and MTI WIRELESS
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and MTI WIRELESS 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 MTI WIRELESS 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 MTI WIRELESS EDGE, you can compare the effects of market volatilities on Cogent Communications and MTI WIRELESS 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 MTI WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and MTI WIRELESS.
Diversification Opportunities for Cogent Communications and MTI WIRELESS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cogent and MTI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and MTI WIRELESS EDGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI WIRELESS EDGE 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 MTI WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI WIRELESS EDGE has no effect on the direction of Cogent Communications i.e., Cogent Communications and MTI WIRELESS go up and down completely randomly.
Pair Corralation between Cogent Communications and MTI WIRELESS
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 0.43 times more return on investment than MTI WIRELESS. However, Cogent Communications Holdings is 2.33 times less risky than MTI WIRELESS. It trades about 0.06 of its potential returns per unit of risk. MTI WIRELESS EDGE is currently generating about 0.02 per unit of risk. If you would invest 4,675 in Cogent Communications Holdings on September 3, 2024 and sell it today you would earn a total of 3,025 from holding Cogent Communications Holdings or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. MTI WIRELESS EDGE
Performance |
| Timeline |
| Cogent Communications |
| MTI WIRELESS EDGE |
Cogent Communications and MTI WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and MTI WIRELESS
The main advantage of trading using opposite Cogent Communications and MTI WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, MTI WIRELESS 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 MTI WIRELESS will offset losses from the drop in MTI WIRELESS's long position.| Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. ATT Inc | Cogent Communications vs. Nippon Telegraph and |
| MTI WIRELESS vs. Evolution Mining Limited | MTI WIRELESS vs. ADRIATIC METALS LS 013355 | MTI WIRELESS vs. International Game Technology | MTI WIRELESS vs. FRACTAL GAMING GROUP |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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