Correlation Between Cogent Communications and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on Cogent Communications and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and FLOW TRADERS.
Diversification Opportunities for Cogent Communications and FLOW TRADERS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cogent and FLOW is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Cogent Communications i.e., Cogent Communications and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Cogent Communications and FLOW TRADERS
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the FLOW TRADERS. In addition to that, Cogent Communications is 1.37 times more volatile than FLOW TRADERS LTD. It trades about -0.12 of its total potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.2 per unit of volatility. If you would invest 2,132 in FLOW TRADERS LTD on September 20, 2024 and sell it today you would earn a total of 120.00 from holding FLOW TRADERS LTD or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. FLOW TRADERS LTD
Performance |
| Timeline |
| Cogent Communications |
| FLOW TRADERS LTD |
Cogent Communications and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and FLOW TRADERS
The main advantage of trading using opposite Cogent Communications and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Cogent Communications vs. Superior Plus Corp | Cogent Communications vs. SIVERS SEMICONDUCTORS AB | Cogent Communications vs. Norsk Hydro ASA | Cogent Communications vs. Reliance Steel Aluminum |
| FLOW TRADERS vs. JLT MOBILE PUTER | FLOW TRADERS vs. Treasury Wine Estates | FLOW TRADERS vs. Sabra Health Care | FLOW TRADERS vs. Cogent Communications Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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