Correlation Between Cogent Communications and CubeSmart
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and CubeSmart 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 CubeSmart 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 CubeSmart, you can compare the effects of market volatilities on Cogent Communications and CubeSmart 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 CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and CubeSmart.
Diversification Opportunities for Cogent Communications and CubeSmart
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cogent and CubeSmart is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart 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 CubeSmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CubeSmart has no effect on the direction of Cogent Communications i.e., Cogent Communications and CubeSmart go up and down completely randomly.
Pair Corralation between Cogent Communications and CubeSmart
Assuming the 90 days trading horizon Cogent Communications is expected to generate 1.23 times less return on investment than CubeSmart. In addition to that, Cogent Communications is 1.59 times more volatile than CubeSmart. It trades about 0.11 of its total potential returns per unit of risk. CubeSmart is currently generating about 0.21 per unit of volatility. If you would invest 4,384 in CubeSmart on September 3, 2024 and sell it today you would earn a total of 271.00 from holding CubeSmart or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogent Communications Holdings vs. CubeSmart
Performance |
| Timeline |
| Cogent Communications |
| CubeSmart |
Cogent Communications and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and CubeSmart
The main advantage of trading using opposite Cogent Communications and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, CubeSmart 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 CubeSmart will offset losses from the drop in CubeSmart's long position.| Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. ATT Inc | Cogent Communications vs. Nippon Telegraph and |
| CubeSmart vs. Extra Space Storage | CubeSmart vs. National Storage Affiliates | CubeSmart vs. Superior Plus Corp | CubeSmart vs. Origin Agritech |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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