Correlation Between Cogent Communications and SCHNEIDER NATLINC
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and SCHNEIDER NATLINC 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 SCHNEIDER NATLINC 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 SCHNEIDER NATLINC CLB, you can compare the effects of market volatilities on Cogent Communications and SCHNEIDER NATLINC 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 SCHNEIDER NATLINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and SCHNEIDER NATLINC.
Diversification Opportunities for Cogent Communications and SCHNEIDER NATLINC
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogent and SCHNEIDER is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and SCHNEIDER NATLINC CLB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHNEIDER NATLINC CLB 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 SCHNEIDER NATLINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHNEIDER NATLINC CLB has no effect on the direction of Cogent Communications i.e., Cogent Communications and SCHNEIDER NATLINC go up and down completely randomly.
Pair Corralation between Cogent Communications and SCHNEIDER NATLINC
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 1.12 times more return on investment than SCHNEIDER NATLINC. However, Cogent Communications is 1.12 times more volatile than SCHNEIDER NATLINC CLB. It trades about 0.05 of its potential returns per unit of risk. SCHNEIDER NATLINC CLB is currently generating about 0.04 per unit of risk. If you would invest 4,631 in Cogent Communications Holdings on September 12, 2024 and sell it today you would earn a total of 2,569 from holding Cogent Communications Holdings or generate 55.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. SCHNEIDER NATLINC CLB
Performance |
| Timeline |
| Cogent Communications |
| SCHNEIDER NATLINC CLB |
Cogent Communications and SCHNEIDER NATLINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and SCHNEIDER NATLINC
The main advantage of trading using opposite Cogent Communications and SCHNEIDER NATLINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, SCHNEIDER NATLINC 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 SCHNEIDER NATLINC will offset losses from the drop in SCHNEIDER NATLINC'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 |
| SCHNEIDER NATLINC vs. North American Construction | SCHNEIDER NATLINC vs. Zoom Video Communications | SCHNEIDER NATLINC vs. AGRICULTBK HADR25 YC | SCHNEIDER NATLINC 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 Stocks Directory module to find actively traded stocks across global markets.
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