Correlation Between Platinum Investment and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Platinum Investment and Cogent Communications 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 Platinum Investment and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and Cogent Communications Holdings, you can compare the effects of market volatilities on Platinum Investment and Cogent Communications 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 Platinum Investment with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Cogent Communications.
Diversification Opportunities for Platinum Investment and Cogent Communications
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Platinum and Cogent is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and Platinum Investment 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 Platinum Investment Management are associated (or correlated) with Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of Platinum Investment i.e., Platinum Investment and Cogent Communications go up and down completely randomly.
Pair Corralation between Platinum Investment and Cogent Communications
Assuming the 90 days horizon Platinum Investment Management is expected to generate 1.54 times more return on investment than Cogent Communications. However, Platinum Investment is 1.54 times more volatile than Cogent Communications Holdings. It trades about 0.04 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about 0.02 per unit of risk. If you would invest 33.00 in Platinum Investment Management on October 17, 2024 and sell it today you would earn a total of 7.00 from holding Platinum Investment Management or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. Cogent Communications Holdings
Performance |
| Timeline |
| Platinum Investment |
| Cogent Communications |
Platinum Investment and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Cogent Communications
The main advantage of trading using opposite Platinum Investment and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment position performs unexpectedly, Cogent Communications 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 Cogent Communications will offset losses from the drop in Cogent Communications' long position.| Platinum Investment vs. Cardinal Health | Platinum Investment vs. Algonquin Power Utilities | Platinum Investment vs. PEPTONIC MEDICAL | Platinum Investment vs. CLOVER HEALTH INV |
| Cogent Communications vs. STORE ELECTRONIC | Cogent Communications vs. Chesapeake Utilities | Cogent Communications vs. United Utilities Group | Cogent Communications vs. QUEEN S ROAD |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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