Correlation Between Cogent Communications and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and SERI INDUSTRIAL 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 SERI INDUSTRIAL 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 SERI INDUSTRIAL EO, you can compare the effects of market volatilities on Cogent Communications and SERI INDUSTRIAL 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 SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and SERI INDUSTRIAL.
Diversification Opportunities for Cogent Communications and SERI INDUSTRIAL
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cogent and SERI is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Cogent Communications i.e., Cogent Communications and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between Cogent Communications and SERI INDUSTRIAL
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the SERI INDUSTRIAL. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Communications Holdings is 3.27 times less risky than SERI INDUSTRIAL. The stock trades about -0.03 of its potential returns per unit of risk. The SERI INDUSTRIAL EO is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 279.00 in SERI INDUSTRIAL EO on September 13, 2024 and sell it today you would lose (9.00) from holding SERI INDUSTRIAL EO or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| Cogent Communications |
| SERI INDUSTRIAL EO |
Cogent Communications and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and SERI INDUSTRIAL
The main advantage of trading using opposite Cogent Communications and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL'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 |
| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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