Correlation Between Cogent Communications and Koninklijke Philips
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Koninklijke Philips 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 Koninklijke Philips 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 Koninklijke Philips NV, you can compare the effects of market volatilities on Cogent Communications and Koninklijke Philips 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 Koninklijke Philips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Koninklijke Philips.
Diversification Opportunities for Cogent Communications and Koninklijke Philips
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and Koninklijke is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Koninklijke Philips NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Philips 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 Koninklijke Philips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Philips has no effect on the direction of Cogent Communications i.e., Cogent Communications and Koninklijke Philips go up and down completely randomly.
Pair Corralation between Cogent Communications and Koninklijke Philips
Assuming the 90 days trading horizon Cogent Communications is expected to generate 1.57 times less return on investment than Koninklijke Philips. But when comparing it to its historical volatility, Cogent Communications Holdings is 1.1 times less risky than Koninklijke Philips. It trades about 0.05 of its potential returns per unit of risk. Koninklijke Philips NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Koninklijke Philips NV on September 12, 2024 and sell it today you would earn a total of 1,304 from holding Koninklijke Philips NV or generate 109.58% 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. Koninklijke Philips NV
Performance |
| Timeline |
| Cogent Communications |
| Koninklijke Philips |
Cogent Communications and Koninklijke Philips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Koninklijke Philips
The main advantage of trading using opposite Cogent Communications and Koninklijke Philips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Koninklijke Philips 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 Koninklijke Philips will offset losses from the drop in Koninklijke Philips' 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 |
| Koninklijke Philips vs. Ribbon Communications | Koninklijke Philips vs. Cogent Communications Holdings | Koninklijke Philips vs. Spirent Communications plc | Koninklijke Philips vs. CHINA TELECOM H |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |