Correlation Between QualTek Services and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both QualTek Services 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 QualTek Services and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QualTek Services and Cogent Communications Group, you can compare the effects of market volatilities on QualTek Services 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 QualTek Services with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of QualTek Services and Cogent Communications.
Diversification Opportunities for QualTek Services and Cogent Communications
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QualTek and Cogent is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding QualTek Services and Cogent Communications Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and QualTek Services 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 QualTek Services 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 QualTek Services i.e., QualTek Services and Cogent Communications go up and down completely randomly.
Pair Corralation between QualTek Services and Cogent Communications
If you would invest 6,546 in Cogent Communications Group on September 3, 2024 and sell it today you would earn a total of 1,783 from holding Cogent Communications Group or generate 27.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
QualTek Services vs. Cogent Communications Group
Performance |
| Timeline |
| QualTek Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cogent Communications |
QualTek Services and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QualTek Services and Cogent Communications
The main advantage of trading using opposite QualTek Services and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QualTek Services 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.| QualTek Services vs. KORE Group Holdings | QualTek Services vs. Consolidated Communications | QualTek Services vs. Grupo Televisa SAB | QualTek Services vs. FingerMotion |
| Cogent Communications vs. Liberty Broadband Srs | Cogent Communications vs. Charter Communications | Cogent Communications vs. Liberty Broadband Srs | Cogent Communications vs. TIM Participacoes SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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