Correlation Between Rogers Communications and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Rogers Communications and IMPERIAL TOBACCO 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 Rogers Communications and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Communications and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Rogers Communications and IMPERIAL TOBACCO 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 Rogers Communications with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Communications and IMPERIAL TOBACCO.
Diversification Opportunities for Rogers Communications and IMPERIAL TOBACCO
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rogers and IMPERIAL is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO and Rogers 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 Rogers Communications are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Rogers Communications i.e., Rogers Communications and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Rogers Communications and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Rogers Communications is expected to under-perform the IMPERIAL TOBACCO. In addition to that, Rogers Communications is 1.09 times more volatile than IMPERIAL TOBACCO . It trades about -0.11 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.36 per unit of volatility. If you would invest 2,585 in IMPERIAL TOBACCO on August 29, 2024 and sell it today you would earn a total of 519.00 from holding IMPERIAL TOBACCO or generate 20.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Rogers Communications vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| Rogers Communications |
| IMPERIAL TOBACCO |
Rogers Communications and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Communications and IMPERIAL TOBACCO
The main advantage of trading using opposite Rogers Communications and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Rogers Communications vs. Apple Inc | Rogers Communications vs. Apple Inc | Rogers Communications vs. Apple Inc | Rogers Communications vs. Apple Inc |
| IMPERIAL TOBACCO vs. Apple Inc | IMPERIAL TOBACCO vs. Apple Inc | IMPERIAL TOBACCO vs. Superior Plus Corp | IMPERIAL TOBACCO vs. SIVERS SEMICONDUCTORS AB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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