Correlation Between Cogent Communications and Axis Bank
Can any of the company-specific risk be diversified away by investing in both Cogent Communications and Axis Bank 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 Axis Bank 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 Axis Bank Limited, you can compare the effects of market volatilities on Cogent Communications and Axis Bank 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 Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and Axis Bank.
Diversification Opportunities for Cogent Communications and Axis Bank
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogent and Axis is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings and Axis Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank Limited 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 Axis Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Bank Limited has no effect on the direction of Cogent Communications i.e., Cogent Communications and Axis Bank go up and down completely randomly.
Pair Corralation between Cogent Communications and Axis Bank
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to under-perform the Axis Bank. In addition to that, Cogent Communications is 1.27 times more volatile than Axis Bank Limited. It trades about -0.12 of its total potential returns per unit of risk. Axis Bank Limited is currently generating about 0.06 per unit of volatility. If you would invest 6,300 in Axis Bank Limited on September 12, 2024 and sell it today you would earn a total of 100.00 from holding Axis Bank Limited or generate 1.59% 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. Axis Bank Limited
Performance |
| Timeline |
| Cogent Communications |
| Axis Bank Limited |
Cogent Communications and Axis Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogent Communications and Axis Bank
The main advantage of trading using opposite Cogent Communications and Axis Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications position performs unexpectedly, Axis Bank 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 Axis Bank will offset losses from the drop in Axis Bank'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 |
| Axis Bank vs. Highlight Communications AG | Axis Bank vs. Tower One Wireless | Axis Bank vs. Entravision Communications | Axis Bank 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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