Correlation Between Cogent Communications and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Sekisui Chemical 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 Sekisui Chemical 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 Sekisui Chemical Co, you can compare the effects of market volatilities on Cogent Communications and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Sekisui Chemical.
Diversification Opportunities for Cogent Communications and Sekisui Chemical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cogent and Sekisui is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Cogent Communications i.e., Cogent Communications and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Cogent Communications and Sekisui Chemical
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the Sekisui Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Cogent Communications Holdings is 1.15 times less risky than Sekisui Chemical. The stock trades about -0.12 of its potential returns per unit of risk. The Sekisui Chemical Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,410 in Sekisui Chemical Co on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Sekisui Chemical Co or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. Sekisui Chemical Co
Performance |
| Timeline |
| Cogent Communications |
| Sekisui Chemical |
Cogent Communications and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Sekisui Chemical
The main advantage of trading using opposite Cogent Communications and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical'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 |
| Sekisui Chemical vs. Lennar | Sekisui Chemical vs. Superior Plus Corp | Sekisui Chemical vs. SIVERS SEMICONDUCTORS AB | Sekisui Chemical vs. NorAm Drilling AS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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